Compound suffers another setback as new issue puts $65 million COMP in jeopardy

Last week, major decentralized finance (DeFi) money market Compound Finance suffered a hitch as nearly $85 million in its native cryptocurrency COMP was put at risk. The DeFi protocol’s founder Robert Lesher revealed that another $65 million of tokens would be put at risk after a function was called for the first time in roughly two months.

Compound discovers new problem

During Compound’s new upgrade, a new bug was introduced that left some users with unusual amounts of COMP to be claimed. Although the developers managed to submit a fix for the bug, it would not take effect until after seven days following the time-lock on code update passes.

According to Lesher, 117,000 COMP has been returned to the community so far. 

However, on October 3, Lesher stated that 202,472.5 COMP is now at risk additionally, after the DeFi protocol’s drip function was called on for the first time in approximately two months. This move allowed tokens held in Compound’s Reservoir made available to users with 0.5 COMP accumulated by the Reservoir for each block. 

A Yearn Finance developer suggested that around one-third of the funds that are at risk due to the drip function were claimed by users on the same day.

So far, the total value of COMP tokens in jeopardy due to the protocol’s bug is now at $147 million, according to the developer.

COMP price may drop lower if support at $313 fails to hold

COMP price has been trapped in a descending parallel channel pattern on the 12-hour chart for nearly a month. The DeFi token continues to record lower lows and lower highs and is now at risk of an 18% plunge.

Compound Finance will discover foothold at the middle boundary of the technical chart pattern at $313 before the bears attempt to push prices lower.

Failing to hold above $313 could see COMP price fall toward the lower boundary of the governing chart pattern at $261. However, further support may emerge at the September 29 low at $279 before the token tags its pessimistic target.

COMP/USDT 12-hour chart

On the upside, resistance will emerge at the 20 twelve-hour Simple Moving Average (SMA) at $332, then at the 50% Fibonacci retracement level at $363, where the 50 twelve-hour SMA sits. Only a massive spike in buying pressure would see the DeFi token break above the parallel channel at $376.