I think this is the funniest thing I’ve ever written about.
To give you some context, Compound
is a blockchain-based bank, allowing users to borrow money and take out loans without the bureaucracy of traditional banking. In turn, Compound rewards lenders with COMP tokens.
But what happens when you reward lenders a little too much?
On Wednesday, after releasing what should’ve been a pretty standard upgrade, Compound’s founder tweeted:
“The new Comptroller contract contains a bug, causing some users to receive far too much COMP.”
That “far too much COMP” came out to $90 million.
An honest mistake. Happens to everybody. So Compound tried to correct its mistake - by threatening to dox users
to the IRS if they didn’t send back their free money.
Only problem (aside from trying to dox your own user base - worst PR move ever):
I’ve been thinking about the legal implications of Web3 for a while - the metaverse and DeFi protocols in particular - and this. is. why.
We’re in a stage of exploration, where the law doesn’t really have a predefined role to play in a landscape that’s using decentralization to eliminate masses of red tape.
In many ways, law and Web3 are propped up by conflicting principles and stand in opposite corners of the ring. It’s only when they spar and decentralized organisations like Compound mess up, that can we begin to understand how laws and Web3 can coexist in harmony.
Until then, though, many more mistakes will happen. I hope they’ll all be this funny.