DeFi

Compound Suspends Four Tokens To Protect From Security Attacks

Protocol for Decentralized Lending Compound has put four tokens on hold as loan collateral on the platform. To safeguard the protocol from market manipulation assaults, the protocol will not enable users to deposit these assets or accept loans.

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On Monday, Compound’s governance members accepted Proposal-131, which requested a halt to using assets with poor liquidity as loan collateral. 0x (ZRX), basic attention token (BAT), maker (MKR), and yearn finance (YFI) are the tokens.

The proposal was carried with overwhelming support, with 554,126 votes in favor, or 99.99% of the votes cast. Only one person voted against the idea.

According to the proposal, the four assets were discovered to have poor liquidity characteristics. Prices of liquid assets can be readily influenced. The measure comes following a $114 million price manipulation attack on Mango Markets, a popular loan market on Solana, earlier this month.

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In reaction to the Mango exploit, Compound creator Robert Leshner, who voted in support of Proposal-131, stated on the Unchained Podcast that lending methods should examine their risk boundaries.

He went on to say that it acted as a wake-up call for lending standards like Compound Finance. An external analysis of the Compound Finance software discovered that specific Compound tokens might be exploited to steal cash.

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Harold

CoinCu News

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.