Reading a contract without reading code

Graduate · enrolled learners

This lesson opens with Compound Proposal 062, 30 September 2021.

What happened

Compound is a large lending protocol governed on-chain by token vote. Proposal 062 upgraded the Comptroller, the contract that distributes the COMP reward token, and one line of the new code used a greater-than comparison where it needed greater-than-or-equal. That single character let users claim COMP they had not earned. Estimates of the erroneous distribution ran from roughly 68 to 90 million dollars depending on the day's price, with a larger sum briefly at risk. The contract was live, verified, and governed by a timelock, so the code was public and readable the entire time, and the fix itself had to crawl back through the same multi-day governance process before it could take effect. Nothing was hidden; the bug sat in deployed, audited code that anyone with a block explorer could open.

The decision point

The people who lost by trusting Compound that week were not hacked in any secret way. The upgraded contract was verified on the explorer, its governance ran on a public timelock, and the flawed proposal was visible and simulatable before it ever executed. The barrier was not access; it was literacy. A user who could read a contract's explorer page, that the source is verified, that it is a proxy someone can upgrade, who the owner is, whether a timelock stands between a decision and its effect, has most of what decides whether to trust it, and needs no Solidity to get there. The autopsy of this course is that the information a user needs is almost always public, and the skill is reading it, not obtaining it.

Recorded loss

$80,000,000

Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.

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