Friday, April 19, 2024

In a possible exploit, DeFi Money Market Compound overpays millions in COMP rewards; the founder claims $80 million is at risk

On Wednesday night, a possible exploit occurred when the DeFi platform Compound accidentally paid out over $80 million in the form of COMP tokens. These were intended to be liquidity mining rewards originally.

User ‘napneger’ on Twitter was the first to point out the issue. He revealed three Ethereum (ETH) transactions that showed that users were receiving millions in COMP tokens. They were receiving these sums in exchange for lending or receiving minor numbers of tokens. He revealed that the Altcoins ETH, DAI, as well as USDC tokens were also exchanged.

$80 Million at Risk

One of the features on Compound is a mining program centered on liquidities. This program provides lenders as well as depositors with rewards. The rewards usually come in the form of an APY of one digit.

However, they accidentally paid out millions in the form of these rewards instead. This could indicate an issue within the comptroller contract. The comptroller contract is responsible for distributing the rewards for the liquidity mining program. A recent upgrade from the company could point to why the issue took place.

Compound and their Comptroller Contract

According to observers, the comptroller contract at Compound is not managed by the company. For a fix that could be exploited to exist, the COMP holders must first be in agreement.

DeFi Llama revealed that Compound is the fifth-largest DeFi protocol in the world. They have a value of nearly $10.2 billion. Through a Twitter update, the company revealed that no user investments were at risk.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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