Compound to fix governance token distribution error

Compound community members unanimously approved activating RFP-064. It is designed to fix an error in the governance token distribution process that arose during the previous update of the lending protocol.

Proposal 064 passed, and can be executed in two days:

1,037,107 COMP ✅
0 COMP ⛔️

For the majority of users, the COMP Distribution will return to normal after execution.

Certain users (that hit the 62 bug) will be unable to claim COMP until after a future patch.

— Compound Labs (@compoundfinance) October 7, 2021

In late September, Compound developers activated RFP-062, aiming to change the governance token distribution model. The update contained a serious vulnerability—the protocol began paying out assets beyond the amount defined by the rules. Thus the project lost $82 million.

In early October, the lead developer of yEarn.Finance under the nickname banteg said that an unknown actor or group exploited the vulnerability to move additional tokens to the problematic Comptroller smart contract address, which had been completely drained in the previous incident.

Founder of Compound, Robert Leshner, then stated that 490,000 COMP were at risk (~$161.7 million at the time).

RFP-064 will be activated on Saturday, October 9. The proposal does not fully solve the problem, but it prevents users from receiving ill-gotten gains.

With the activation of the proposal, the liquidity mining process will resume, but only users who did not interact with the markets affected by the exploit (cTUSD, cMKR, cSUSHI, cYFI, cAAVE and cSAI) will be able to withdraw COMP tokens.

«After the proposal is activated we will be able to identify the full list of users who unfairly received COMP. Then we will propose another update that will fix the COMP balances on their accounts, returning everything to its rightful place», — according to a statement from Compound Labs.

On October 1, Jack Chervinsky said that left the position of Chief Legal Counsel at Compound Labs. He had held the post for two and a half years.

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