A recent update to the Compound Finance lending protocol has resulted in some strange occurrences regarding COMP token distribution.
Some users of the Compound Finance protocol have received more than usual amounts of COMP tokens to be redeemed following an update to the platform.
Compound reported the incident in a tweet on Sept 30 confirming that no lent or borrowed funds are at risk.
“Unusual activity has been reported regarding the distribution of COMP following the execution of Proposal 062. No supplied/borrowed funds are at risk — Compound Labs and members of the community are investigating discrepancies in the COMP distribution.”
Too much COMP
The update from Proposal 62 went live on Sept 30, changing the distribution to liquidity suppliers and borrowers from a previous 50:50 split to new governance proposed ratios.
A bug in this update has resulted in too much COMP being distributed to some users, some of which were able to claim millions of dollars worth of tokens. Protocol founder Robert Leshner took to Twitter explaining:
“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.”
He added that the impact is bounded and the worst-case scenario would be 280,000 COMP tokens, worth around $84 million at the time of press. Leshner claims that due to Compound’s decentralization, the distribution contract could not be changed without governance interaction.
“There are no admin controls or community tools to disable the COMP distribution; any changes to the protocol require a 7-day governance process to make their way into production. Labs, and members of the community, are evaluating potential steps to patch the COMP distribution.”
DeFiLlama developer ‘0xngmi’ has been delving into the situation reporting that all buggy rewards were on the borrowing side, and exploiters were people that had borrowed some time ago, borrowing now and trying to exploit doesn’t work. The developer posted a list of addresses that had exploited the bug and stated that:
“One of the people that exploited Compoundfinance took their 10M in COMP and dumped them on OKEX and Huobi for stables, then started farming curve with them.”
Token price tanks
COMP token prices have taken an 11.5% hit on the day, tumbling back to $295 at the time of press according to CoinGecko. The token has lost 30% over the past month and is now down 67% from its May 12 all-time high of $910.
Compound Finance launched a DeFi Treasury for institutions in June but that has remained unaffected.
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