Blockchain platform Compound Accidentally Distributed $90 million worth of Cryptocurrency Due to an Error

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The blockchain platform for trading cryptocurrency assets Compound mistakenly paid its users more than $ 90 million. The project network has started distributing large rewards in project tokens (COMP) for no apparent reason.

The Compound protocol is designed for making loans in cryptocurrency. COMP is an application management token that is automatically distributed to those who invest in the platform, make loans there, or fulfill their loan obligations. It allows you to vote for changes to the platform and influence interest rates.

According to the founder of the project, Robert Leshner, the incident occurred due to the recent update of the DeFi Compound Finance interest rate protocol – it contained an error, due to which some users still have an unusual number of COMP tokens as a reward for making a loan.

It is noted that the error was contained in Proposition 62, which entered into force recently. His task was to rethink the distribution of COMP between liquidity providers and borrowers based on ratios established by corporate governance, in contrast to the previous 50/50 share division model used.

The error caused the contract to increase the amount of funds that were paid to users. One of the users reported that he managed to use the trick and received 90 thousand COMP tokens — about $27 million. So, he managed to request an exchange of funds with a 100/0 split, so he received 90 thousand COMP ($27 million), providing the platform with 0 Ether ($0) in return, only paying about $170 for gas.

Against the background of the investigation of the incident, representatives of Compound appealed to users of the protocol with the announcement that their funds are not in danger. Despite this, the COMP rate has fallen.

The founder of Compound wrote a message on Twitter, where he threatened to report to the tax service about those who received millions of dollars due to an error and did not return the funds. Many users agreed with Robert's decision, because they will have to pay taxes on the received tokens.

Others criticized the founder of the blockchain platform for threats and explained that if the tax service intervenes, Lashner will receive back only 40% of the erroneous payments.

People who took advantage of the error can keep 10% of the received tokens. I will publish the personal data of those who do not return the rest of the funds, " Lashner wrote.

However, users of the social network criticized the actions of the founder of the platform, after which he apologized and said that all his words about the tax service were "stupid tweets".

According to the developers, the Compound team does not have any platform controls, as it is in the hands of the community. Lashner clarified that a vote among users is required to make a refund of all funds. If we assume a positive result of this process, then even in this case, the refund will take at least a week.

 

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Blockchain in a bank: how financial institutions are using new technology​

Blockchain in a bank is used primarily to facilitate money transfers and payments

Which banks are using blockchain?

Bankers are usually skeptical about innovative technologies. Blockchain was no exception - financiers do not always understand how to use distributed ledgers in a regulated banking system. However, attitudes towards technology have changed over the past few years.

More than half of business leaders believe that investing in this technology will be critical to their company's success over the next three years, according to an Accenture report. And a Deloit poll found that 43% of CEOs see blockchain as one of their top five strategic priorities.
PaySpace Magazine has compiled a selection of banks that invest in various blockchain-related initiatives.

Santander has started building an international money transfer system One Pay FX on the blockchain .

A major European bank will launch payments via Ripple for individuals.

The solution is built on the basis of Ripple blockchain technology. And it will be available to private customers in Spain, UK, Brazil and Poland.
The transfer can be made through the Santander One Pay FX mobile application. In terms of time, such a transaction will take several minutes (at least the next day). In addition, Santander with Broadridge, JPMorgan Chase and Northern Trust is testing a voting system for shareholders of financial institutions.
HSBC is the first in the world to complete a blockchain trade finance transaction.

According to HSBC, the bank conducted the transaction for the agricultural company Cargill, which was involved in the shipment of soybeans from Argentina to Malaysia.
The British holding used the Corda blockchain platform developed by the R3 consortium. The counterparty was the Dutch bank ING, which also uses the blockchain.
The transaction took 24 hours, although such transactions usually take up to 10 days.
JPMorgan Chase, the largest US banking holding company, announced its intention to launch a new payment processing system based on its own blockchain development Quorum at the end of 2017. A few months later, the bank thought about making this project independent, allowing other banks to also use this blockchain. After all, the main value of the blockchain is precisely in the network effect.

Quorum was developed by JPMorgan using the Ethereum protocol. This specialized blockchain platform is designed to improve the efficiency of several types of banking operations, including clearing and settlement of derivatives, as well as cross-border payments.

According to CB Insights, Goldman Sachs has become one of the largest investors in blockchain technology. In May 2018, the bank announced the imminent launch of a service for trading bitcoin futures. The financial institution planned to use its equity capital to trade securities on behalf of and at the request of its clients.

Leading investment bank will launch a service for trading bitcoin futures.

At the end of last year, British bank Barclays announced the creation of a blockchain alternative to SWIFT transfers. The new translation system is based on the Hyperledger Fabric blockchain. For this, the bank has already joined the CLS Group blockchain consortium, which also includes JPMorgan Chase, Goldman Sachs and the Bank of China. Once the system is up and running, customers will be able to choose whether to send money through the old or new system.

Japanese bank Mitsubishi UFJ (MUFG) is set to release a new blockchain-based payment platform for micropayments and Internet of Things (IoT) applications from Akamai. A new blockchain payment service will appear in 2019. The platform will be able to process one million transactions per second, and it will take no more than two seconds to complete the payment.

Chinese banks are also interested in technology. In 2017, 12 Chinese banks, including Bank of China, China Merchants Bank, China Construction and Agricultural Banks, used blockchain in various services. So, financial institutions have implemented technology in applications to improve the issuance of invoices and international loans, authentication processes.
China's Agriculture Bank of China, for example, has automated lending through a decentralized network. The bank began providing loans to traders working in the agricultural industry. And China Construction Bank launched a blockchain platform for issuing interbank and international loans to small businesses. The total amount of transactions processed by the service is $ 251 million.
In India, 7 banks will immediately get access to a simplified system of trade finance, risk management and process automation thanks to the blockchain developments of the Indian IT giant Infosys. The system was named India Trade Connect.