Over $1 Million in user funds permanently locked in Compound fork Percent Finance

Percent Finance, the fork of Compound, declared that their money markets experienced a technical bug, thus locking $1M of user funds permanently.

By · Nov 6, 2020 . 5min read

$1M user funds locked in Percent finance news

A community-owned fork of Compound Finance, Percent Finance, declared today that some of their money markets encountered an issue that leads to permanent locking of users’ funds amounting to $1M. According to an announcement post issued by the development team behind the project on Wednesday night, the funds comprising USDC, WBTC, and ETH — are locked because of an abrupt error that happened when the team transformed an interest rate parameter. This implies users can no longer borrow, supply, repay, or withdraw their assets.

The locked funds involve 28 WBTC, 446,000 USDC, 28 WBTC, and 313 ETH. In a Twitter thread issued on Wednesday evening, the Perfect Finance team states that the three frozen markets utilize an older version of an interest-bearing token on the platform, CTokens. On November 4, Percent Finance decided to update these tokens to a more modern interest model. 

 However, because the interest model formula and the old CToken code were contrary, the tokens became locked, the team stated. The three old-style CTokens were updated to utilize a new style interest rate model. This made the CToken fail when attempting to accumulate interest, which it does as a component of every user operation.

Percent Finance seeks help from Circle, Coinbase and BitGo.

According to the thread, the team has discovered the error and can code for a new contract that will be compatible. However, transferring old contracts over to the new contracts is not possible. The problem is severe because the error is irreversible. The Percent Finance team stated it is seeking help from Circle, Coinbase, and BitGo to help release the USDC and WBTC funds. Moreover, the affected users should contact the community moderator through direct messages of a dedicated Discord channel.

Percent Finance came into existence in September 2020 as a fork of a popular DeFi lending protocol, Compound Finance. The project positions itself as a decentralized money market that provides users access to permissionless lending and borrowing. However, it intends to develop fair and unmanipulated markets.

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