Major DeFi lending platform Compound erroneously paid out unusual amounts of COMP tokens following an update to one of its smart contracts.
The update bug resulted in the misdelivery of over $80 million worth of COMP tokens intended as liquidity mining rewards. Following the bug report, the COMP token plummeted.
The issue was first pointed out by Twitter user @napgener who specified three transactions where users received a total of $15 million in COMP tokens by just borrowing and supplying tiny quantities of tokens.
Following the news, Compound Labs, the team behind Compound Protocol, tweeted on Wednesday:
“Unusual activity has been reported regarding the distribution of COMP following the execution of Proposal 062.
No supplied/borrowed funds are at risk — Compound Labs and members of the community are investigating discrepancies in the COMP distribution.”
The cause of the bug was seemingly related to the implementation of “Proposal 62”, with Compound explaining that the funds in the lending/borrowing pool were not affected by the bug.
Proposal 62 was brought on to change the COMP distribution to liquidity suppliers and borrowers based on governance proposed ratios instead of the previous 50/50 split.
However, the update bug led some users to claim as much as 168,000 COMP tokens, totaling approx. $50 million.
At 1:38 UTC on Thursday, a user claimed 91,000 COMP tokens worth $27 million.
Compound Labs are still investigating the bug and issued the following notice:
“There are no 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. Labs, and members of the community, are evaluating potential steps to patch the COMP distribution.”
Compound is one of the most popular DeFi platforms with nearly $100 billion in assets under management.