- Users of DeFi lending platform Compound were erroneously sent $89 million worth of cryptocurrency.
- A glitch in a recent platform update led to some users receiving too much "COMP."
- "This is the greatest opportunity, and greatest risk for a decentralized protocol," Compound's CEO tweeted.
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A glitch in an update this week to the decentralized finance platform Compound has led to roughly $89 million worth of a cryptocurrency called COMP to be accidentally sent out to users.
Now the CEO is asking users to voluntarily return the funds.
"If you received a large, incorrect amount of COMP from the Compound protocol error: Please return it to the Compound Timelock," Robert Leshner tweeted. He also threatened to report to the Internal Revenue Service all of those who did not and later apologized for the "bone-headed tweet." Compound and Leshner did not immediately respond to a request for comment.
Compound allows users to lend out their crypto assets and earn interest, and the platform is governed by computer code protocols that are voted on by the community and subject to a seven-day governance process.
-Robert Leshner (@rleshner) September 30, 2021
The platform is not hosted or run by the company, but across a distributed network of users. As such, there are no admin controls or other tools for the company to halt or reverse the distribution of the digital tokens, Leshner tweeted.
"This is the greatest opportunity, and greatest risk for a decentralized protocol-that an open development process allows a bug to enter production," he wrote.
On Friday afternoon, Leshner thanked two users for "returning COMP to the community."
"This is not an event that calls into question whether DeFi can be operated safely. It's a wake up call for decentralized, community-run protocols to improve the processes by which changes are introduced," Leshner told Bloomberg, calling for a lengthier review process and more community developers hunting for errors.
Still, financial policy analyst and crypto critic Andrew Park told Bloomberg that incidents like this undermine investor confidence in decentralized finance projects.
"There are reasons to criticize the existing banking system, but there are a lot of safeguards in place to prevent these kinds of things from happening," Park said. "If I have my money in Compound, how much faith am I going to have in that system now?"
Earlier this week, a crypto exchange accidentally paid $24 million in fees to send just $100,000 over the ethereum network, in one of the biggest "fat finger" errors in the history of digital assets.
