An example showing the physical bitcoin along with the binary code displayed on a laptop.
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We thought genocide was over for the popular decentralized money, or DFI, protocol compound, but as it turns out, millions are at risk more than we thought. About 2 162 million has been seized after an upgrade went very wrong, According to Robert Lesnar, Founder of Compound Labs.
The price of the compound’s native token, called the comp, has dropped by about 4.8%.
First, the compound main Tweeted Friday There was a cap on how many comp tokens could be accidentally distributed, noting that “impact is limited, worst, 280,000 comp tokens” or about .6 92.6 million.
But on Sunday morning, Lesnar revealed that the already emptied cash pond had been refilled – another 202,472.5 comp tokens were unveiled for exploitation, or about .9 66.9 million at its current value.
Someone is doing this bill, including a core developer on the DFI platform Yarn As the biggest fund loss in the case of smart contracts, but investors, for their part, don’t seem to care so much.
“The crypto market has closed the biggest fund loss of all time,” said Mudit Gupta, the main developer of the decentralized crypto exchange SushiSwap. “The future of DFI is bright but we are in unfamiliar territory and still have a lot to learn.”
Which is going wrong
Defy protocols such as compounds have been designed Enrich traditional self-executing smart contracts using blockchain to rebuild traditional enduring financial systems such as banks and exchanges.
On Wednesday, the compound should have been upgraded to a nice standard. Immediately after implementation, it was clear that something was seriously wrong, once users started getting comp tokens millions of dollars.
For example, a token worth $ 30 million was claimed in a transaction.
The saving grace of the whole disaster, was the fact that the pool of cash that was open to exploitation – called regulatory contracts – had a limited amount of tokens. The problem is that this leak pool has received new cash flow, and 0.5 comp tokens are being added every 15 seconds, according to Gupta.
“When the drip () function was called this morning, it sent backlog (202,472.5, about two months comp) to the protocol for distribution to users,” Lesnar wrote in a tweet on Sunday morning.
Lesnar noted that this put the total company at risk of 490,000 comp tokens, or about 2 162 million.
There are several proposals for bug fixes, but the compound governance model is such that any change to the protocol requires a multi-day voting window, and Gupta said it would take another week for the successful proposal to take effect.
In the meantime, this pool of cash is back to catch up for users who know how to use bugs.
The compound made it clear that no funds provided or borrowed are at risk, which is somewhat comforting.
“No user’s funds are at risk or at risk so it’s not such a big deal,” Gupta said. “Everyone has somehow become thinner but hasn’t lost anything directly.”
There are also some white hats in the community.
After compound founders asked users to voluntarily return the platform’s crypto tokens, some did. Lesnar said that as of Sunday morning, about 117,000 comp tokens or $ 38.7 million had been returned.
But as Mattie Greenspan, portfolio manager and founder of Quantum Economics, points out, how things work with this bug is almost entirely on the point. “The biggest problem is – can it happen again?” He said.
Compound is the fifth largest DFI protocol in the world with a total value of 10.3 billion, according to the DFI Lama, which provides ranking rankings and metrics for the DFI protocol.
Greenspan said the protocol could easily absorb the damage and much of it would probably be reimbursed, “but the big problem would be if people lose confidence in the system’s ability to function properly.”
An immediate problem, Gupta said, is that the regulator’s account has given the reserved token reserved for future rewards.
You can think of the comptroller as the heart of the compound, Gupta explained. It simplifies all the key features like core, nding and rewards.
The regulator oversees the cash used to provide rewards to users who provide their crypto to cry recipients at a fixed interest rate, which is usually a single digit APY.
“Future rewards may have to be reduced to creating regulatory solvents,” Gupta said.