By Shelly Melancon (Switzerland)
DeFi lending protocol, Compound will likely have its woes compounded to the tune of $65 million in COMP, reports indicate. This follows a delay in fixing the bug that initially caused it to lose $90 million after it sent out in an unwitting act of generosity excess rewards to some of its users. Now, the same incident but of lesser magnitude may play out if the software bug is not quickly fixed.
However, the protocol seems to be in a literal fix because the bug cannot be fixed immediately since it is time-locked. The same bug cost Compound a fortune last week when it mistakenly sent out liquidity mining rewards in excess to a section of users. As the report filtered in, Compound announced that it had lost $90 million to the error.
Compound Waits One Week To Fix Bug Due to Time Lock
The delay in fixing the ‘generous’ bug is attributable to governance measures that do not allow devs of the protocol to act on issues like that until a week after. According to reports, the debugging process will not start until October 7th, thereby putting the protocol at more risk.
Explaining the protocol’s present dilemma, Compound founder Robert Leshner revealed in a tweet that over 200,000 COMP tokens valued at $65 million are currently at risk after devs called what he termed the ‘drip function’ for the first time in close to two months.
Also read:Speaking further, Leshner said that it is this function that releases tokens stored in the protocol’s Reservoir to users. According to Leshner, the Reservoir stores 0.5 COMP at every block. He added that a significant amount of the
funds belonging to users are in the Reservoir.
Compound Gets 117,000 COMP Tokens Back From its Lost $90 Million
In another tweet, the Compound founder shared more details noting that the total number of COMP tokens at risk for the protocol is 490,000, with 136,000 COMP still in what he referred to as the ‘Comptroller’ and 117,000 tokens retrieved from community members, meaning a portion of the initial $90 million COMP mistakenly distributed had been sent back. Leshner went ahead to thank the users who returned the COMP largesse in the same tweet.
One developer named Mudit Gupta took a swipe at Compound for using time-locked governance on its platform. The developer revealed that more than 100 persons were privy to the risk that the drip function bore for the protocol since the bug was discovered last week. However, their hands have been tied due to the so-called time lock. Gupta added that this was one of the cons of upgradable smart contracts.
Meanwhile, following the bug’s discovery, the price of COMP declined by 3% from $330 to $286 instantly. The DeFi token has managed to recover, climbing to $340 on Saturday. Losing 7% of its $347 high, COMP was trading at $322 as of press time.
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