DeFi pulse error puts CEO in soup

  • 10% should be kept as a white hat. Otherwise, it’ll be reported to the IRS as income
  • The data from DeFi Pulse, Compound is the world’s fifth-largest decentralised financial system, with more than $9 billion in value secured
  • The problem caused the price of Compound’s native token, COMP, to drop roughly 13% in one day, but it has since recovered

Following a programming error in an upgrade, the decentralised finance (DeFi) lending protocol Compound delivered $90 million to customers by mistake. The founder is now pleading with the public to repay the funds.

If you received a large, incorrect amount of COMP as a result of the Compound protocol error, please send it back to the Compound Timelock. 10% should be kept as a white hat. Otherwise, it’ll be reported to the IRS as income, and the majority of you will be doxed, CEO Robert Leshner tweeted.

Leshner pleading for return 

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Leshner responded a few hours later, after receiving some critical comments to his initial tweet, he said he is doing everything I can to assist the community reclaim some of its COMP, and this was a blunder of a tweet. He wrote that it is entirely his fault. Fortunately, the community is considerably larger and more intelligent than just himself. He appreciates sarcasm and encouragement.

The data from DeFi Pulse, Compound is the world’s fifth-largest decentralised financial system, with more than $9 billion in value secured. Compound, like many other DeFi platforms, compensates some users with tokens in exchange for using the platform and generating liquidity.

Transforming legacy financial system

The startup is on a mission to transform the legacy financial system, which is slow, inefficient, and restricted by intermediaries, as per the website. The problem caused the price of Compound’s native token, COMP, to drop roughly 13% in one day, but it has since recovered.

The other DeFi protocols have had similar problems, notably Alchemix, which lost $4.8 billion a few months ago. Although the cash number is frightening, Daniel Giles Helm, Developer Relations at Skynet Labs, tells GOBankingRates that it’s vital to realise that no one’s base assets were compromised.

Diluting effect

The diluting effect of releasing so many COMP tokens has caused some price shock, but the team and community’s fast response should remind us why crypto is so fascinating. Compound has plenty of goodwill as an early inventor in the field, and DeFi has seen projects like Alchemix recoup over 50% of lost cash just because of the generosity of their community.

The problem in Compound was caused by an upgrade earlier this week. Proposal 62 went into effect a few hours ago, altering the Comptroller contract, which distributes COMP to protocol users. Leshner tweeted at the time, The new Comptroller contract contains a flaw, causing some customers to receive far too much COMP.

All assets supplied, borrowed assets, and positions are unaffected. Users do not need to be concerned about their funds, the only risk is that you (or another user) will acquire an excessive amount of COMP. 

 

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Ritika Sharmahttp://www.thecoinrepublic.com
Ritika Kumari Sharma is an Economics Honors graduate from the University of Calcutta. She is completely into finance and believes that cryptocurrencies are the future. She is an enthusiast learner about the cryptocurrency and blockchain technology.

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