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DeFi bug accidentally provides $90 million to users; the founder begs them to return it

DeFi bug accidentally provides $90 million to users; the founder begs them to return it

October 4, 2021: -About $90.1 million has mistakenly gone out to users of popular DeFi staking protocol Compound after an upgrade gone epically wrong. Now, the founder is making a plea to incentivize the voluntary return of the platform’s crypto tokens.

“If you received a large, incorrect amount of COMP from the Compound protocol error. Please return it,” Robert Leshner, founder of Compound Labs, tweeted late Thursday.

“Keep 10% as a white-hat. Otherwise, it’s being reported as income to the IRS, and most of you are doxxed,” continued the tweet.

The price of Compound’s native token, COMP, firstly plunged almost 13% in a day on news of the bug, but it’s since gained background.

Whether reward recipients choose to return many millions of dollars to the platform remains to be seen, though if history is any indication, it is certainly possible.

“Alchemix (another decentralized finance, or DeFi) had a similar incident a few months back where they gave out more rewards than intended,” blockchain security researcher Mudit Gupta told CNBC. “Nearly everyone who got the extra rewards refunded the extra.”

“This makes me optimistic that people will refund most of the COMP tokens, as well, but you can never be sure,” he said.

DeFi protocols like Compound are designed to recreate traditional financial systems like banks and exchanges using blockchains enriched with self-executing smart contracts.

On Wednesday, Compound rolled out what should have been a pretty standard upgrade. But after implementation, it was clear that something had gone seriously wrong.

“The new Comptroller contract contains a bug, which causes some users to receive far too much COMP,” explained Leshner on Twitter.

“There are zero 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,” he adds, which indicated that no fix could take effect for seven days.

A core developer at decentralized crypto exchange SushiSwap, known as Gupta, said that the entire episode could be blamed on a “one-letter bug” in the code.

A compound made clear that no supplied or borrowed funds were at risk, but that did little to soften the blow.

Protocol users en masse began reporting massive windfalls. Soon after Leshner’s tweet about the bug, $29 million worth of COMP tokens were claimed in one transaction. Another claimed that they are receiving 70 million COMP tokens into their account or about $20.8 million at the time of their post.

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