Compound Facing More Problems: More Than $140 Million in Tokens up for Grabs

Compound, one of the main cryptocurrency lending protocols on Ethereum, is facing serious problems again. According to banteg, a Yearn developer, someone called a function that moved more funds to be available for users to claim. Now, users can claim up to $140 million of the protocol’s native currency, comp. Compound is hoping users won’t claim these tokens and is rallying to patch the bug that caused this problem in the first place.

Compound, a decentralized finance protocol, aggravated its current situation when someone called on a function that put more funds at risk of being claimed. The function, called drip, sent more than 200,000 comp (Compound’s native token) to the Comptroller contract, the component that was affected by a bug last week, allowing users to claim unusually high amounts of comp.

According to banteg, developer of another leading defi protocol, Yearn, this was the “best-kept secret in DeFi.” The drip function moves funds between the “cold wallet” contract of the token — that manages the reservoir — to the Comptroller to be distributed among users. The dev also stated that five different addresses could drain $45 million of these tokens, which would have a very detrimental effect on the price of the asset.

Robert Leshner, founder of Compound Labs, was quick to acknowledge the issue. He stated that this function was not called for weeks and that he expected the bug to be patched before new funds could be put at risk. Due to Compound’s governance characteristics, the bug introduced last week is still waiting for new proposals to be approved in order to apply a patch to correct it.

However, Leshner was optimistic about the future of the protocol, stating:

I’m optimistic about the patches making their way through the governance process, which fix the distribution, and the community members that are working to manage this bug.

The community is calling for changes to how these governance proposals are managed and approved. A user in Twitter proposed introducing a new kind of governance proposal to deal with bugs quickly, treating them as emergency updates. This new event that puts more tokens at risk has apparently affected comp’s price, which has gone from $340 to $317 in just the last 24 hours.

What do you think about Compound’s issues and its governance model? Tell us in the comments section below.