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Compound (COMP) Bears Take Full Control As Price Dips 20% In 7 Days

Compound (COMP), a leading player in the decentralized finance (DeFi) sector, has encountered a significant setback, witnessing a 20% decline in its price over the past week. The downward trend continued with a 3.06% decrease in the last 24 hours and an additional 0.79% shrinkage in the most recent hour, placing the current price at $55.62 per COMP. Moreover, COMP is now 93.90% below its all-time high of $911.20, a substantial drop from its previous peak.

Related Reading: Crypto Analyst Points To Bitcoin Price History Repeating Itself – Are The Signs Bullish?

Challenges Ahead For Compound

Currently priced at $56.69, Compound (COMP) holds the 85th spot among all cryptocurrencies based on market capitalization. With 7,792,894 COMP tokens in circulation, the token’s total market capitalization amounts to $440,641,903. The current rankings and market performance indicate that COMP faces significant challenges amid recent market conditions. 

Compound (COMP) has experienced a signifcant dip this week: Source @Tradingview

Recent price declines have resulted in COMP slipping down the rankings, indicating the need for cautious monitoring of market conditions. In the ever-changing landscape of cryptocurrencies, tokens must continuously adapt to market trends, technological developments, and regulatory changes to maintain and improve their positions. As investors and traders navigate this complex environment, they must exercise due diligence and stay informed about the factors affecting the performance and rankings of tokens like Compound.

COMP Price Analysis And Prediction

This persistent bearish movement is a cause for concern, and potential investors should exercise caution. The current market conditions suggest that COMP is in a downtrend, indicating that the token is experiencing a dip. Various factors, including market sentiment, external events, and regulatory developments can influence price declines of this magnitude.

Examining the situation from a broader perspective, the Compound cryptocurrency’s price trajectory is anticipated to maintain a bearish outlook as long as it remains below the $71 threshold. At present, the trading value rests at $58.28. Should the price break below $51, it is likely to head towards the midpoint of the established trading range, situated at $40. A more substantial retracement would lead to a reevaluation of the lower range boundary, potentially bringing it down to $26.

Related Reading: XRP Whales Trigger Price Decline With Large Selling

However, there is a silver lining for those considering investing in Compound. Over the past 90 days, the token recorded a 44.33% price increase, adding $17.41 to its previous value of $39.28. This demonstrates that Compound has displayed positive performance in the past, indicating the potential for a rebound once market conditions stabilize. The cryptocurrency market is characterized by cycles of ups and downs and historical data suggests that tokens like COMP can recover and experience growth after periods of decline.

(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).

Featured image from iStock, chart from TradingView

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Compound Finance Suffers Bug Leading To ~$50M Token Distribution

Compound Finance (COMP) has seemingly suffered a token distribution bug after introducing and passing a recent governance vote that addressed rewards distribution, Proposal 62. Shortly thereafter, Compound reported in a tweet that there was unusual behavior regarding COMP distribution following the vote, but that “no supplied/borrowed funds are at risk.”

The funds that are in jeopardy due to the bug sit only in the Comptroller contract, which means that there is a total cap of 280,000 COMP tokens that are at risk. However, that’s still a hefty number, worth over $80M USD at the time of publishing. One transaction was reportedly as high as nearly $30M alone.

Let’s Get Movin’

With governance often comes the lack of immediate action. As Compound Finance CEO and Founder Robert Leshner noted in a tweet discussing the events at hand, “there are no admin controls or community tools to disable the COMP distribution; any changes to the protocol require a 7-day governance process.”

The Compound team quickly rolled out the initial governance process with Proposal 63 up for review, which temporarily disables COMP distribution rewards while the team and community address the fix for the protocol.

Leshner adds that while Proposal 63 is up for review, “a patch to restart the distribution is in development.” While this gives the team time to address the issue, Proposal 63 does note that all ~280,000 tokens will be at risk.

While the recent Compound bug showed immediate price impact, buyers quickly came back to market and the COMP token has still showed long-term resiliency. | Source: COMP-USD on TradingView.com

Related Reading | TA: Ethereum Consolidates, Why Bulls Could Aim Fresh Rally

Take 10%

Leshner has since gone on Twitter asking recipients of mistaken distributed COMP to return it, with the below tweet:

If you received a large, incorrect amount of COMP from the Compound protocol error:

Please return it to the Compound Timelock (0x6d903f6003cca6255D85CcA4D3B5E5146dC33925). Keep 10% as a white-hat.

Otherwise, it's being reported as income to the IRS, and most of you are doxxed.

— Robert Leshner (@rleshner) October 1, 2021

He took a bit of heat for the tweet, and followed up by stating that it was a “bone-headed tweet / approach” and that his intentions lie in “trying to do anything I can do to help the community get some of its COMP back.”

Smart contract specialist Kurt Barry noted just how costly small errors in code can impact blockchain projects:

Smart contracts are unforgiving of the tiniest errors…COMP bug is a tragic case of ">" instead of ">=" (in two code locations). Two characters, tens of millions of value lost.

— Kurt Barry (@Kurt_M_Barry) September 30, 2021

Truly a tough set of circumstances for the Compound Finance community, however many have shown approval of Leshner’s response.

The move is not the first mishap in the rapidly growing world of DeFi. Last month, the Poly Network suffered a hack that cost over $600M USD. In a bit of a bizarre set of circumstances, the Poly hacker returned most of the stolen crypto back to the network. And in the last week, cross-chain DeFi protocol pNetwork lost over $12M USD in tokenized Bitcoin to attackers.

Related Reading | Visa Is Building A Payment Channel Network On Ethereum

Featured image from Pexels, Charts from TradingView.com