Bug found in smart contract of Defi Platform; countermeasures resulted in price drop – The Coin Republic

Bug found in smart contract of Defi Platform; countermeasures resulted in price drop – The Coin Republic

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One of the leading Defi platforms, Convex Finance (CVX), has re-deployed its smart contract in order to get rid of a non-crucial bug found by Popcorn. Since the smart contract of the protocol is immutable and can’t be upgraded, the patch could not be fixed. 

The team had to unlock the total locked value in CVX tokens, deploy the smart contract again and lock the unlocked tokens again. Convex Finance on Friday announced the change on Twitter and urged users to relock their CVX tokens again. 

In a blog post shared on Medium by Convex Finance stated that the bug has no prior used instances while the deployment of the vlCVX contract. However, the bug found was not crucial for the protocol, yet it needed to be fixed to avoid damage. Since Convex Finance contracts are unchangeable and non upgradable, the only option was to deploy a new contract. With the new vlCVX contract, the potential movement of the bug has been fixed.

However, Convex Finance took the measures on time to counter the potential bug threat. Still, maybe the skepticism or inconvenience of relocking the tokens, whatever the reason, affected the token price. The prices fell by almost 20% in just a few hours, from $19.1 to $15.2. However, later the day situation got slightly better, and currently, it’s been trading at $16.8. 

About the bug, the teams stated that the bug found on the Convex Finance smart contract was not that dangerous for user funds. Since it was not that much harmful yet, the possibilities are it could allow expired locks value to relock again directly to a new address. Because of this, the address would claim more cvxCRV in rewards that they had earned already. With the redeployment of the smart contract, the potential threat has now been avoided, and the previous contract has been abandoned. 

A yield generator named Popcorn has found the bug, which also funds social organizations. Employees at the firm alerted Convex about the existence of the bug. Convex Finance will also pay a bounty reward to Popcorn for its contribution. 

The Defi protocols all over consist of a staggering amount of more than $250 billion in their total locked value. Convex Finance is one of the leading Defi protocols which comes at the second position across all the platforms in terms of total value locked. 

ALSO READ: Bitcoin network would witness an enhanced transaction privacy

Nancy J. Allen

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