Compound labs protocol mistakenly awards $70 million

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cryptocurrency

 

Yesterday, we reported on a massive financial mistake where Bitfinex awarded many millions of dollars to an Ethereum miner – today, we have a similar kind of accidental windfall given to multiple users of the Compound Finance interest rate protocol.

 

“Despite the developments, the team has stressed that no funds either supplied or borrowed are at risk,” writes Tom Farren at Cointelegraph. “Users of the protocol are reporting sizable windfalls, one claiming a deposit of 70 million COMP tokens into their account, equivalent to $20 million.”

 

Compound Labs, the company behind it all, claims to have over 14 billion in assets including BAT and AAVE, with a play to offer the ability for investors to get gains off of interest on crypto holdings.

 

Now, tech media are looking at something called “proposal 62,” which apparently includes a bug that delivered some $70 million in value to investors, by accident.

 

“Proposal 62 and the new contract were written by a community member, with review from multiple other community members,” said Compound Labs founder Robert Leshner in a press statement. “This is the greatest opportunity, and greatest risk for a decentralized protocol–that an open development process allows a bug to enter production.”

 

In describing the snafu as a “reverse rug pull,” Mudit Gupta, also named in Farren’s coverage, tweets about how a “one-letter bug” was responsible for creating all of this consternation, suggesting that details are available at Etherscan.

 

Gupta also ties the current problem to a similar misfire at the Alchemix exchange that delivered $4.8 million in error, that analysts refer to as a “free money bug.”

 

“For an unknown amount of time, Alchemix borrowers could deposit ethereum (ETH, 1.89%), get the project’s alETH token in return and then withdraw the ETH used to secure their loans without having to pay them back,” wrote Coindesk’s Benjamin Powers at the time.

 

If crypto investment and digital assets are going to be taken seriously, we probably have to try to fix these types of problems.

 

Now, people are wondering whether all of these erstwhile beneficiaries are going to return their mistaken gains; letters to Dear Abby and other such experts suggest that you’re not legally allowed to keep erroneous payments from a traditional bank – so you would think the same would hold true in a cryptocurrency world. Chaos in ownership is something that these technologies are supposed to be able to avoid! Stay tuned.

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