COMP down 10% as Compound Finance loses over $70 million in tokens to supply bug

  • Compound Finance has reported unusual activity on the unfairly distribution of COMP tokens.
  • The distributed COMP is up more than $70 million and is likely to reach as high as $85 million. 

Crypto lending DeFi startup Compound Finance reported that a supply bug mistakenly awarded users over $70 million in its COMP token. Compound Finance stated that the token distribution bug is within its newly implemented Proposal 062. Unlike its primary function to “split COMP rewards distribution and bug fixes,” the upgrade has resulted in over-rewarding suppliers. 

Before Compound Finance installed Proposal 062, the DeFi startup conducted the proper verification and ensured that there were no issues. However, the team noticed that there was an unusual activity within hours. The bug accidentally allowed some users to claim as much as $50 million in COMP tokens. 

Apparently, COMP’s bug event occurred due to the omission of two characters. There were cases of “>” instead of “>=” in two code locations. The mistake of omitting those two mistakes led to the loss. 

In light of the event, Compound Finance said, “Compound Labs and members of the community are investigating discrepancies in the COMP distribution.” Also, the Compound Finance team has assured that both supplied and borrowed funds are safe. The team also said that it was investigating discrepancies in the COMP distribution. The startup’s founder, Robert Leshner, also explained in a Twitter thread:

A few hours ago, Proposal 62 went into effect, updating the Comptroller contract, which distributes COMP to users of the protocol. The new Comptroller contract contains a bug, causing some users to receive far too much COMP.

Compound Finance loses COMP tokens to supply bug

According to the founder, “the impact is bounded, at worst, 280,000 COMP tokens.” He also mentioned that all funds are not at risk. He added that the only risk is that some users have received an unfairly large quantity of COMP. 

Speaking further, the founder noted that members of the community wrote Proposal 62 and the new contracts. After then, there were reviews from more members of the community. He added:

This is the greatest opportunity, and greatest risk for a decentralized protocol–than an open development process allows a bug to enter production.

Leshner said in the Twitter thread that there are no admin controls or community tools to put an end to the COMP distribution. It requires a 7-day governance process to enable any changes to the protocol. 

Following the news on the bug, COMP has lost more than 10 percent. Data showed an increase in selling pressure, pulling the coin’s value down to around $270. At press time, however, COMP is trading at $299.42. COMP has lost over 10 percent in its market valuation. The token has also declined above 30 percent over the past month. Since COMP reached its all-time high of $910 in May, the crypto asset has shed roughly 67 percent.

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Bio: Ibukun Ogundare is a crypto writer and researcher who uses non-complex words to educate her audience. Ibukun is excited about writing and always looks forward to bringing more information to the world.

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