Bug in DeFi Protocol Compound Mistakenly Sends $82 Million In COMP Rewards to Users

Bug in DeFi Protocol Compound Mistakenly Sends $82 Million In COMP Rewards to Users

Robert Leshner, the founder of the DeFi project, which has the fifth-largest TVL at $9.63 billion, says the mistaken claims have been at worst 280k COMP tokens worth about $82 million.

Decentralized finance protocol (DeFi) Compound encountered a bug in its code that resulted in erroneously giving an unusual amount of COMP tokens worth millions of dollars in liquidity mining rewards.

“Unusual activity has been reported regarding the distribution of COMP following the execution of Proposal 062,” tweeted the team late on Wednesday.

But the team assured that no supplied or borrowed funds are at risk, and the team is investigating discrepancies in the COMP distribution.

Proposal 62, which went into effect on Wednesday, intended to have two different COMP distribution rates for each market, borrow-side and supply-side rates, instead of the previous 50/50 share model.

But the updated Comptroller Contract contained a new bug that allowed some users to claim thousands of COMP tokens. According to Robert Leshner, founder of Compound Labs, the mistaken claims have been at worst 280k COMP tokens worth about $82 million.

“Exploiters were people that had borrowed some time ago, borrowing now and trying to exploit doesn’t work,” said 0xngmi of DeFiLlama.

In a series of tweets, Leshner shared that the new Comptroller contract ended up distributing far too many COMP tokens to users of the protocol. The proposal and the contract, he further shared, were written by a community member.

“All supplied assets, borrowed assets, and positions are completely unaffected. Users don’t have to worry about their funds; the only risk is that you (or another user) receives an unfairly large quantity of COMP.”

Leshner went on to explain that there are no tools or admin controls to disable this COMP distribution. Moreover, any changes to the protocol require a 7-day governance process to make their way into production.

Compound Labs and community members are now “evaluating potential steps to patch the COMP distribution.”

Compound Finance is the fifth largest DeFi project with $9.63 billion in total value locked (TVL), down from almost $13 billion ATH earlier this month.

The project token has a market cap of $1.73 billion and is down 12% in the past 24 hours to trade at $293.69, down 68% from the mid-May peak of $910.5.

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Author: AnTy

Compound Rolls Out Cross-Chain DeFi Platform, ‘Gateway’ on Testnet

Decentralized finance (DeFi) protocol Compound has announced its latest addition to the blockchain network called Gateway on testnet. The new blockchain is built on a Substrate blockchain, and it would enable users to access cross-chain interest rates and collateralized markets.

Gateway Built On Substrate Blockchain

Initially announced in a Dec. 18 whitepaper, Compound had revealed that its latest upgrade would come with a multi-asset platform that enables the transfer of value and liquidity between peer ledgers.

Decentralized protocols have varying asset value on their platform, making it difficult for DeFi to really grow.

Compound aims to address this issue with its Gateway launch. Gateway would allow users to borrow assets native to one network with collateral from another. That means borrow Ether, provide collateral in CELO.

Gateway is said to run on a more modern programming language called Rust. This will see the multi-paradigm programming language increase performance and safety of the blockchain.

The substrate blockchain will also eliminate the consensus algorithms which has plagued older generation blockchains like Bitcoin. Instead, the team settled on building its own application code, enabling it to bring to developers only features that matter the most.

Compound says Gateway is fully upgradeable, which will enable governance token holders to vote on code upgrades without worrying about forks or downtimes.

Gateway would be powered by a dollar-pegged stablecoin called CASH, which would be used to settle interest payments on collateralized deposits.

Network validators (nodes) have also been considered in the upgrade. Compound says validators will earn a portion of all interest in every market in addition to transaction fees.

Gateway is currently running a testnet on Ethereum’s Ropsten testnet and will go live in the coming months.

Compound Reaching For The Stars

Compound says its goal does not end with Gateway. The DeFi platform could evolve into the backbone of a global interest rate market with the capacity to support any asset, including future currencies, assets, and tokens.

In the coming months, it has set clear goalposts for the Gateway project. Stress tests will be conducted before the mainnet launch. Gateway would also be integrated into its Compound protocol currently running on Ethereum’s blockchain network. Compound Finance is a big player in the DeFi space with around $5 billion in locked funds, according to DeFi Pulse.

Compound’s token rallied 15% following the announcement. This surge has seen it climb one step higher to rank as the 40th most valuable crypto by market cap, according to coinmarketcap. It currently trades at $510 at press time; the asset has come a long way from its ATH of $535 on Feb.13. The crypto-asset now has over $2.3 billion market valuation and is projected to rise further before the year runs out.

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Author: Jimmy Aki

Compound to Release a New Cross-Chain Protocol with CASH Token Next Year

Compound Finance has released a new Compound Chain project — “a distributed ledger capable of transferring value & liquidity between peer ledgers.”

The team is currently building a testnet implementation, which is expected to be released in the next quarter. The project will also be bringing other popular DeFi projects like Polkadot, Solana, Quorum, and Celo into the protocol.

Designed to complement the Ethereum contracts, it would be controlled by COMP governance and extend DeFi network effects.

COMP, the $694 million digital asset, is currently trading at $158, up 40.4% in the past 30 days but down 36% YTD. The white paper reads,

“The Compound Chain is designed from the ground up to enable bridging value between its connected ‘peer’ chains.”

The Compound Chain will have CASH as its native unit of account, created through borrowing, much like MakerDAO’s DAI. CASH will be borrowable against any supported asset as collateral.

This CASH unit will be used to pay traction fees on the Chain, and interest would be paid to the CASH holders.

The value of one CASH is set at one US dollar, but through governance, it would later begin to track an alternate index, such as a basket of currencies.

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Author: AnTy

$100M In Crypto Loans Liquidated On Compound After ‘Bizarre’ 30% Spike In DAI Price

  • Over $100 million in loans were liquidated on Compound after a possible oracle exploits on Coinbase.
  • A further $8 million in crypto loans were liquidated on dYdX, a DeFi lending platform.

Almost $103 million in loan collateral has been liquidated on Compound Finance, a DeFi lending and borrowing platform, over the last 24 hours after a price spike on DAI stablecoin on Coinbase. According to data aggregator, LoanScan, a further $7.81 million was also liquidated on the dYdX exchange, totaling close to $110 million in DeFi loan liquidations.

Nearly $110 million in crypto loans liquidated over the past 24 hours after a DAI suddenly spikes 30% in price (LoanScan)

The momentary DAI price spike

DAI caused massive liquidations on Compound as the price of DAI momentarily spiked by 30% on Coinbase, the lending platform’s primary price oracle. According to Alex Svanevik, CEO at Nansen, a crypto-analysis firm, the liquidations arose from an under-collateralization of Compound users’ loans. Svanevik said,

“My understanding is that the DAI price on Coinbase was driven up to a premium of around 30%. Compound’s oracle uses Coinbase for pricing data.”

Nearly 45% of the total liquidated amount on Compound arose from one wallet address, the third-largest COMP farmer, facing liquidation in a total of $46 million.

So how exactly does a DAI price spike to $1.30 cause such massive liquidations?

As a lending/borrowing platform, Compound allows users to borrow and lend multiple cryptocurrencies across the platform. Borrowers must place more significant collateral than the loan they are receiving over collateralized loans. If, at any moment, the smart contract notices the loan is under-collateralized, then it will automatically liquidate the loan and repay itself. Svanevik further explains,

“This caused liquidations as the value of the loans exceeded collateralization-ratio thresholds.”

As DAI’s value spiked, the amount of DAI loaned out increased relative to the collateral provided, leading to under-collateralized positions, hence the liquidations.

Of the total $110 million in crypto loans liquidated, $56 million was from DAI borrowers, $38 million from Ethereum (ETH) borrowers, $10 million from USDC stablecoin borrowers, and $4 million from wrapped BTC (wBTC).

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Author: Lujan Odera

Coinbase Adds Compound to Its ‘Learn & Earn’ Program; Users Rewarded With Free COMP

  • Coinbase Earn adds Compound (COMP) rewards.
  • COMP token is the ninth token users can learn about to earn rewards.

Coinbase, the largest crypto exchange in the U.S., offers Compound (COMP) token rewards for users to learn about the governance protocol. In a blog post released on Wednesday, Coinbase Earn, the learning wing of the exchange, announced users could start earning COMP rewards by “watching videos and completing quizzes about the Compound protocol and its governance token, COMP.”

The Coinbase Earn project aims to educate and explain the vast world of crypto and new developments in the ecosystem. As the world of decentralized finance surges, Coinbase aims to have a wholesome view in pushing forward adoption in the space, including voting, buying, staking, and mining – pairing them with intense and incentivized education.

“You can now start advanced tasks for Earn Compound (COMP) on Coinbase. Learn how to use USD Coin with Compound Finance, natively within the Coinbase Wallet app. Start learning how to earn interest with Compound today”. – Coinbase on Twitter.

Coinbase Earn launched in 2018, offering users an opportunity to learn while stacking up cryptocurrencies in rewards. Compound joins the program as the ninth token allowing users to earn from learning on various blockchain projects.

So far, Coinbase Earn has collected over $100 million in rewards to distribute to customers in the program from 0x (ZRX), Basic Attention Token (BAT), Zcash (ZEC), Stellar Lumens (XLM), EOS, Dai (DAI), Tezos (XTZ), Orchid (OXT) and now Compound (COMP).

This allows unbanked and underbanked users to receive crypto straight to their wallets, enhancing global financial inclusion.

At launch, Coinbase Earn will allow users to earn $10 worth of COMP tokens. While the rewards are not great, the value arises from learning how the DeFi governance protocol works.

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Author: Lujan Odera

Yearn Finance Offering Tokenized Nexus Mutual Insurance Covers for 5 Top DeFi Protocols

YearnFinance is all set to provide insurance for the popular DeFi projects that involve Balancer, Compound, Curve, Synthetix, and Yean Finance itself.

“Impossible to be bullish DeFi and not see insurance as a critical pillar,” noted Jason Choi of crypto fund The Spartan Group.

These tokenized insurance covers will be underwritten by Nexus Mutual with no know-your-customer (KYC) and anti-money laundering (AML).

Tokenizing the insurance policy also means there are many possibilities here, such as they can be transferred, bought, sold, or even collateralized.

As Nexus Mutual founder Hugh Karp shared in an interview with Nick Tomaino, they see a lot of demand, “especially from prosumer type people (either hedge funds or bigger players in the space that want cover on smart contracts).”

For the past six months, they have been working on scaling up the capital that hasn’t been enough to meet all of their demand, and now have up to $60 million of critical mass of capital.

Interestingly, Yearn is the only contract that is maxed out, which could be because “gut feel is that it’s perceived to be higher risk … (as) Andre tests in prod.”

Nexus Mutual is currently looking at building new products like stacked risk cover to cover all the risks involved in interacting with DeFi along with oracle failures and such.

Yinsure.finance, however, isn’t ready for use yet, and as updated by Yearn Finance, it will be opened to a limited user base first.

Yearn Finance is growing at a fast pace, bringing new features for the market. Just last week, the popular DeFi protocol announced a crowdfunding on DeFi.

“The emergence of decentralized funding comes at a time when credit is drying up, as lenders tightened their coffers despite all the excess liquidity,” noted trader and economist Alex Kruger.

Amidst this, YFI is enjoying the growth Yearn Finance is seeing, approaching $1 billion in TVL.

Over the weekend, YFI made a new all-time high at $37,621 as per CoinGecko, which had its market cap surpassing the $1 billion mark.

According to BitMEX co-founder and CEO Arthur Hayes, who has also been yield farming, YFI will be hitting $100,000.

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Author: AnTy

Compound Protocol to Roll Out Decentralized Oracles Dubbed ‘Open Price Feed’

Compound, one of the most popular defi protocol, is all set to introduce open price feeds for lending on its platform using a decentralized oracle. This decentralized oracle would offer live price feeds, which would make the lending process more simplified. Open price feeds are being tested across several blockchain network including Ethereum (ETH) Kovan and Ropsten testnet. The open price feed has been live on the mentioned testnet for almost two weeks now.

Compound’s developer community has appealed to the members to come together and test the new open price feeds on the platform so that the developers can integrate it into the protocol as early as possible.

How Does Open Price Feed Work?

Open Price Feed system relies on permissionless price reporters and posters, where exchanges act as a reporter (earlier Coinbase Pro was the only exchange acting as a reporter). The reporter is responsible for signing the price feeds regularly with their public key. After reporters sign the price feed, posters would be responsible for pushing out the signed price feeds. Posters in this system are permissionless, which means anyone can become a poster if they like.

Apart from Coinbase Pro as the reporter, the system also makes use of on-chain Uniswap V2 price feed as a fallback or to verify the price feeds signed by Coinbase Pro. Uniswap is called an anchor in this system and makes sure that the data does not deviate from the market value. If the on-chain data signed by reporter differ by more than 20% for 30-60 minutes, in that case, off-chain data would be ignored.

Many other price data feed providers would join the network via governance token COMP. It is also believed once Compound aggregates enough price feeds from multiple trustworthy sources, the use of Uniswap price feeds would be discarded altogether.

Compound launched its protocol token back in June using which people can participate in the on-chain Protocol decision. 50% of these tokens would be distributed via liquidity mining incentive program. At the same time, the remaining 50% token would be distributed among early investors and developers.

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Author: James W

Compound’s DeFi Craze Continues As Institutional Crypto Custodian, Curv, Opens Up Support

Curv, the crypto custody startup, is using the Compound protocol to help institutions earn passive income on their crypto assets. The startup has gained popularity among asset managers, exchanges, and other institutional clients. However, as of now, only deposits are made possible on the platform, and Curv said that as it reaches more people, it would add borrowing of crypto assets as well.

Curv integrates Compound protocol in its platform, which allows these institutional investors and hedge fund managers to lend their crypto assets and use smart contracts to earn passive income or withdraw loans in any ERC-20 tokens.

Josh Schwartz., Curv Chief Operating Officer, commented on their decision to integrate Compound in their platform and said:

“We got requests for it maybe about two, two-and-a-half months ago. The Compound is the first DeFi integration. They’ve seen a lot of growth lately, and they lead the way with 40% of DeFi value locked up in their protocol. Compound has a long list of institutions who would love to interact with them but need a secure stack to do so.”

The COO also highlighted that they had to build a separate policy engine to integrate Compound’s Ethereum-based smart contracts on its platform.

Curv is currently in an expansion mode and opened its first office in Asia in April of this year with an office based in Hong Kong in association with Japan-based Crypto Garage. The firm also raised $23 million in Series A funding round, which attracted investment from the likes of Coinbase Ventures and the investment arm of Germany’s Commerzbank.

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Author: Rebecca Asseh

Compound’s Total Loan Values Touches $1 Billion As the DeFi Yield Farming Craze Continues

Compound, a decentralized finance (DeFi) lending platform, reaches $1 billion in total loans disbursed since launch to over 4500 borrowers.

According to Compound’s official site, the platform has already disbursed over $1 billion in crypto-denominated loans as the rush of yield farming gets stronger by the day. Compound currently leads the yield farming craze, whereby depositors and borrowers place their digital assets in different DeFi platforms to earn the most significant interest.

On Sunday evening, the total borrowed amount stood at $985 million before ‘yield sharks’ borrowed another $16 million on Monday to surpass the $1 billion mark barrier. While the borrowing and lending of crypto assets have been going on for a while – Maker (MKR) is leading the charge for the better part of years. Compound’s launch of the COMP token rewards tilted the favor to its side, allowing users to earn more yield from lending operations.

The Total Locked Value?

One of the most popular oracles to check the progress of DeFi products such as Compound is DeFi Pulse. The platform, however, focused on the total value locked (TVL), which is calculated as the total amount deposited minus the entire borrowed amount. Currently, at $695 million in TVL, Compound is the most extensive DeFi product, holding 30.41% of the total market value.

Maker comes a close second with a total of $631 million locked, while ‘yield craze platforms’ such as Synthetix, Aave, and Balancer a distant third, fourth, and sixth on the log.

DAI Leading the Markets

According to stats provided on the Compound website, DAI stablecoin leads in the amount borrowed by investors on the platform. The stablecoin dominates with nearly 80% of the total amount borrowed with USDC, ETH, and 0x taking up 14%, 2%, and 1% of the borrowed amount, respectively.

However, some numbers seem not to be adding up – especially on DAI. According to Coingecko, the total market capitalization of DAI is $193 million, but the entire supply on Compound reads over $850 million. This is majorly due to the leveraging of tokens to create strategies to increase DAI interest rate payments and earning COMP tokens.

COMP’s Miracles

Since the launch of its governance token, COMP, on Jun 15, the platform witnessed a spike in the value locked as investors try to get their hands on COMP rewards. The TVL on Jun 15 stood at $97 million and immediately started bursting through barriers reaching $608 million just a week later as the crypto world took note of the ‘yield farming’ opportunities.

COMP token is currently trading at $173, registering a slight 2 percent drop in the last 24 hours, registering a total market capitalization of $443 million.

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Author: Lujan Odera

Binance And OKEx Latest Crypto Exchanges To List, COMP, Compound’s Governance Token

Compound (COMP) is setting an impressive rise since its launch a fortnight ago with the coin’s price, popularity, and total value locked have seen multiple times growth rates since then. Additionally, several crypto exchanges have rushed to list the token after its impressive performance. After additions to Coinbase Pro, Coinbase, and FTX derivatives exchange, COMP is now set to start trading on OKEx and Binance.

OKEx launches COMP spot trading

Big exchanges are jumping on to listing Compound’s governance token in what can only be described as a FOMO move listing a two-week-old token. OKEx becomes the latest exchange to launch trading pairs of the coin, including the Tether (USDT) and Bitcoin (BTC) pairs.

Users can buy, sell, deposit, and withdraw COMP from the exchange as of Monday, Jun 29, the announcement reads. Trading opened at 9 AM UTC, and as at the time of writing, only 228 COMP has been traded on both pairs on the exchange.

COMP currently trades at an average of $235 across major exchanges representing a 4.31% drop in the past 24 hours. The daily trading volumes remain high at $11 million across 31 listed pairs on over ten exchanges – COMP reached an all-time high daily trading volume of $31 million on Friday.

Safe or not? Binance launches futures trading

In a similar breath, Binance launched futures trading of the COMP token offering USDT settled contracts starting Tuesday, June 30. The statement reads,

“Binance Futures will launch COMP/USDT perpetual contract, with the trading opening on 2020/06/30 09:00 AM (UTC). Users will be able to select between 1-50x leverage.”

However, a section of crypto traders has come forward criticizing the exchange for its high leverage positions on a relatively new token in the market. It is a question of making a profit vs. a safe environment for traders.

Binance, which has been at the forefront in speaking on the need to protect users, faces a dilemma as the volatility of an unproven token may cause a similar flash crash to Matic Network’s in December 2019 and with it liquidate users’ funds.

Rise to the top

Compound is a platform that allows users to earn interest by lending and borrowing digital assets. Launched in 2019, the company ascend to the top of the DeFi industry comes as a shock to many. Compound is currently the largest DeFi platform overtaking Maker (MKR) in total asset value locked (TVL), according to Defipulse.com.

Compound dominates the industry with $626 million in digital assets locked on the platform, representing 38.2% of the total value in decentralized finance.

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Author: Lujan Odera