They mistakenly give away more than 90 million dollars in cryptocurrencies due to a failure in the Compound system
Several users woke up with up to $ 29 million 'extra' in their cryptocurrency portfolio due to a bug in the Compound system. Now, the founder of the platform asks the beneficiaries to return the funds.
Maybe you remember the story of the man who invested $ 400 in cryptocurrencies and woke up a millionaire . Well that is exactly what happened to some users of the decentralized finance platform Compound Finance . Following an error in the system update, more than $ 90 million in tokens were mistakenly distributed. Now, the founder asks the lucky ones to return the funds and threatens sanctions if they don't.
On September 29, several users were shocked to check the balance of their electronic wallet and see that they had unexpected amounts of Compound (COMP) cryptocurrencies .
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In a Twitter thread , the user 'Napgener' collected cases of people who obtained hundreds, thousands and even millions of dollars in tokens. The largest transaction would be for about $ 29 million , while another user claimed to receive 70 million compounds, equivalent to about $ 20.8 million .
All supplied assets, borrowed assets, and positions are completely unaffected. Users don't have to worry about their funds; the only risk is that you (or another user) receives an unfairly large quantity of COMP.- Robert Leshner (@rleshner) September 30, 2021
If the tokens delivered by mistake had been the 729,000 covered by the update, the losses could have reached as much as 233 million dollars. However, this does not affect the deposited funds of users , the platform clarified in a tweet.
Why did Compound hand out $ 90 million in crypto?
Finance decentralized protocols (DIFS) are designed to mimic traditional financial systems like banks and stock exchanges based on technology blockchain (block chain) transactions running through programs known as smart contracts, explains the average RT .
That Wednesday, Compound released an update that contained a bug or bug , and began handing out COMP tokens randomly to users. This led to some receiving "a large amount" of tokens that were for them, explained Rober Leshner, founder of the platform .
The process could not be stopped because "there is no administrator control or community tools" and the implementation of any change to the protocol "requires a seven-day process," explained the manager.
Unusual activity has been reported regarding the distribution of COMP following the execution of Proposal 062.- Compound Labs (@compoundfinance) September 29, 2021
No supplied / borrowed funds are at risk - Compound Labs and members of the community are investigating discrepancies in the COMP distribution.
The entire volume linked to the direction of the smart contract, worth $ 90.1 million , has been fully spent, according to Mudit Gupta , developer of the decentralized platform SushiSwap, to CNBC .
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How did the error affect the Compound (COMP) price?
On the day of the failure, the value of the Compound (COMP) token fell just over 15% : from $ 338 to around $ 286 per unit.
Soon after, the cryptocurrency rallied to a price of around $ 340 . It is still far from the nearly $ 500 it cost between July and August, and even further from the all-time high of $ 910 it reached on May 12, 2020.
At the close of this note, the COMP registers a downward trend again.
Leshner also asked recipients of the failure to return the funds. As a reward, he offered them to keep 10% of what they received and avoid being exhibited before the United States tax system.
“If you received a large and incorrect COMP sum due to the Compound protocol error, please return it to the Compound Timelock. Take 10% in reward . Otherwise, this will be reported as income to the Tax Service and most of you will be exposed, ” the Compound founder wrote Thursday.
With this, the manager made it clear that the platform has the identities of its users and could use them at any time. Of course, this did not sit well with devotees of decentralized finance, a community that highly values your privacy and the security of your data.
Hours later, Leshner apologized and acknowledged that his message was inappropriate. "Fortunately, the community is much bigger and smarter than I am," wrote the businessman.
I'm trying to do anything I can to help the community get some of its COMP back, and this was a bone-headed tweet / approach. That's on me.- Robert Leshner (@rleshner) October 1, 2021
Luckily, the community is much bigger, and smarter, than just me.
I appreciate your ridicule and support.