Received $162 Million After Bug in DeFi Protocol Compound

Texas News Today

We thought the massacre of the popular DeFi staking protocol Compound was over, but in the end, millions more were at risk than we thought. Growth. After a very unsuccessful upgrade, you’ll get about $162 million. According to Robert ReschnerFounder of Compound Labs.

Compound’s native token, called comp, is down about 4.8% in price.

First, the compound head tweeted on Friday Note that there is a limit to the number of COMP tokens that can be erroneously distributed, with “the worst-case impact being limited to 280,000 COMP tokens”, or approximately $92.6 million. ..

But on Sunday morning, Reischner revealed that a once-empty pool of cash had been replenished – revealing another 202,472.5 comp tokens to be exploited, or roughly $66,900,000 at current prices. did.

Some people, including the main developers of DeFi platform Eiron, are claiming this In the case of smart contracts as the biggest money loss in history, but investors don’t care much on their part.

Mudit Gupta, lead developer of distributed crypto exchange Sushi Swap, said: “DeFi has a bright future, but we are in an unknown territory and we still have a lot to learn.”

DeFi protocols such as Compound are designed to: Reproduce traditional financial systems such as banks and exchanges using a blockchain powered by self-acting smart contracts.

On Wednesday, Compound released what was supposed to be a fairly standard upgrade. However, soon after implementation, as users began receiving millions of dollars worth of COMP tokens, it became clear that something serious was in jeopardy.

For example, a single transaction charged $30 million worth of comp tokens.

However, the advantage of overall mistake savings was that there was a finite amount of tokens in a pool of cash that could be misused (called a controlling contract). The problem is that new cash is flowing into this leak pool, adding 0.5 comp tokens every 15 seconds, according to Gupta.

“When the drip() function was called this morning, a backlog (202,472.5, comp was called about two months later) was sent to the protocol for distribution to users.” Reschner wrote in a tweet on Sunday morning..

Leshner said it would add 490,000 comp tokens, or roughly $162 million, to the riskier comp.

There are many suggestions to fix the bug, but Compound’s governance model says changing the protocol requires a voting period of several days, and Gupta says the proposal will take another week to come to fruition. Growth.

In the meantime, this pool of cash can be recovered for users who know how to exploit bugs.

The compounding showed that the funds supplied or borrowed were not at risk. It’s relaxing.

“It’s not a big deal as the user’s money was not at risk or not at risk,” Gupta said. “Everyone was a little thin, but I didn’t lose anything straight away.”

There are also some white hats in the community.

Some did so after the founders of Compound asked users to voluntarily return the platform’s crypto tokens. As of Sunday morning, about 117,000 comp tokens, or $38.7 million, had been refunded, Reschner said.

But as Matty Greenspan, portfolio manager and founder of Quantum Economics, points out, how things go with this bug is almost entirely undeniable. “The big question—could this happen again?” he said.

According to DeFi Lama, who provides rankings and metrics for the DeFi protocol, Compound is the fifth largest DeFi protocol in the world, with a net worth of $10.3 billion.

Greenspan said the protocol can easily absorb this loss and many are likely to come back. “But the bigger problem is when people lose faith in the proper functioning of the system,” he said.

According to Gupta, one of the immediate problems is that the account of the controller distributed the tokens of compensation reserved for future compensation.

Gupta explained that the controllers can be thought of as the heart of the campus. Facilitates all core operations like borrowing, lending and rewards.

The financial auditor oversees the pool of cash used to reward users who offer cryptography to borrowers at a set interest rate (usually a single point APY).

“It may be necessary to reduce future compensation for using the controller as a solvent,” Gupta said.

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