Compound users received $80 million in cryptocurrency for free

DeFi-protocol gave away 280,000 COMP tokens due to a bug in the smart contract responsible for distributing funds to borrowers and liquidity providers
Compound users received $80 million in cryptocurrency for free

DeFi-protocol Compound has paid out more than $80 million worth of free 280,000 COMP tokens to borrowers and liquidity providers, Compound Labs founder Robert Leshner said on Twitter. Compound is a decentralized platform that lends in COMP tokens and gives them away as rewards.

According to Leshner, the incident occurred because of an error in updating the smart contract, which is responsible for the distribution of funds. The error caused the contract to increase the amount of funds being paid out to users. One user withdrew $27 million worth of COMP tokens.

The developers cannot correct the erroneous token distribution because they have no such rights, and the management of the project is in the hands of its community. In order to get the tokens back, a vote must be held among their holders. If approved, the process will take at least a week, Leshner said.

Because of an error in the smart contract and free giveaway, the price of the COMP token dropped 10% to $296 in 24 hours, and its capitalization fell to $1.7 billion, according to CoinGecko.

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