• Sat. May 21st, 2022

They mistakenly give over $ 90 million in cryptocurrency due to Compound system failure

ByHazel R. Lang

Oct 4, 2021

Perhaps you remember the story of the man who invested $ 400 in cryptocurrency and woke up a millionaire. Well, this is exactly what happened to some users of the decentralized finance platform. Compound funding . Following an error in updating the system, over $ 90 million in tokens were distributed in error. Now, the founder asks the lucky ones to return the funds and threatens sanctions if they do not do so.

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On September 29, several users were shocked to check their e-wallet balance and found that they had unexpected amounts of Compound cryptocurrencies (COMP) .

In a Twitter feed , user “Napgener” has collected cases of people getting hundreds, thousands and even millions of dollars in tokens. The largest transaction would be around $ 29 million , while another user claimed to have received 70 million compounds, which equates to approximately $ 20.8 million .

If the erroneously delivered tokens had been the 729,000 covered by the update, losses could have reached $ 233 million. However, it does not affect users’ deposited funds , the platform said in a tweet.

Why did Compound distribute $ 90 million in crypto?

Decentralized Financial Protocols (DIFS) are designed to mimic traditional financial systems like banks and stock exchanges based on technological blockchain (to block chain) transactions executed through programs called smart contracts, explains the average RT .

This Wednesday, Compound posted an update that contained an bug or bug , and started distribute COMP tokens randomly to users. This has led some to receive “a large quantity” of tokens intended for them, explained Rober Leshner, founder of the platform .

The process could not be stopped because “there is no administrator control nor community tools” and the implementation of any modification of the protocol “Requires a seven day process”, explains the manager.

The entire volume linked to the management of the smart contract, worth $ 90.1 million , has been fully spent, according to Mudit Gupta , developer of the decentralized platform SushiSwap, at CNBC .

How did the error affect the price of the compound (COMP)?

On the day of the default, the value of the Compound token (COMP) fell just over 15% : from $ 338 to approximately $ 286 per unit.

Shortly thereafter, the cryptocurrency rallied at a price of around $ 340 . We are still far from the nearly $ 500 it cost between July and August, and even further from the record $ 910 it reached May 12, 2020.

At the close of this note, the COMP again records a downward trend.

Source: CoinMarketCap.com

Leshner also questioned the recipients about the non-return of funds. As a reward, he offered to keep 10% of what they received and avoid being shown to the US tax system.

“If you received a large and incorrect COMP sum due to a compound protocol error, please resend it to the compound time lock. Receive 10% reward . Otherwise it will be declared as income to the tax department and most of you will be exposed ”, the founder of Compound wrote on Thursday.

With this, the manager made it clear that the platform has the identities of its users and can use them at any time. Of course, this was not suitable for enthusiasts of decentralized finance, a community that places great importance on your privacy and the security of your data.

Hours later, Leshner apologized and admitted that his post was inappropriate. “Fortunately, the community is much bigger and smarter than me”, wrote the businessman.



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