Connect with us

Published

on

traffic_analyzer | Getty Images

We thought the carnage was over for popular decentralized finance, or DeFi, staking protocol Compound, but as it turns out, millions more than we thought are at risk. About $162 million is up for grabs after an upgrade gone very wrong, according to Robert Leshner, founder of Compound Labs.

The price of Compound’s native token, called comp, is down about 4.8%.

At first, the Compound chief tweeted Friday that there was a cap to how many comp tokens could be accidentally distributed, noting that “the impact is bounded, at worst, 280,000 comp tokens,” or about $92.6 million.

But on Sunday morning, Leshner revealed that the pool of cash that had already been emptied once had been replenished – exposing another 202,472.5 comp tokens to exploit, or roughly $66.9 million at its current price.

Some, including a core developer at DeFi platform Yearn, are billing this as the biggest-ever fund loss in a smart contract incident, but investors, for their part, don’t seem to care all that much.

“The crypto market shrugged off the largest-ever fund loss as if it was nothing,” said Mudit Gupta, a core developer at decentralized crypto exchange SushiSwap. “The future for DeFi is bright but we’re in uncharted territory, and there’s a lot to be learned still.”

What keeps going wrong

DeFi protocols such as Compound are designed to recreate traditional financial systems such as banks and exchanges using blockchains enriched with self-executing smart contracts.

On Wednesday, Compound rolled out what should have been a pretty standard upgrade. Soon after implementation, however, it was clear that something had gone seriously wrong, once users started to receive millions of dollars in comp tokens.

For example, $30 million worth of comp tokens were claimed in one transaction.

The saving grace of the entire debacle, however, was the fact that the pool of cash that was open to exploit – something called the Comptroller contract – had a finite amount of tokens. The problem is that this leaky pool got a fresh influx of cash, and 0.5 comp tokens are being added roughly every 15 seconds, according to Gupta.

“When the drip() function was called this morning, it sent the backlog (202,472.5, about two months of COMP since the last time the function was called) into the protocol for distribution to users,” Leshner wrote in a tweet Sunday morning.

Leshner noted that this brought the total comp at risk to 490,000 comp tokens, or about $162 million.

There are a few proposals to fix the bug, but Compound’s governance model is such that any changes to the protocol require a multiday voting window, and Gupta said it takes another week for the successful proposal to be executed.

In the meantime, this pool of cash is once again up for grabs for users who know how to exploit the bug.

Compound made clear that no supplied or borrowed funds were at risk, which is some consolation.

“No user funds are or were at risk so it’s not that big of a deal,” said Gupta. “Everyone kinda got diluted but didn’t lose anything directly.”

There are also some white hats in the community.

After the Compound founder begged users to voluntarily return the platform’s crypto tokens, some did. Leshner said that as of Sunday morning, about 117,000 comp tokens, or $38.7 million, had been returned.

But as Mati Greenspan, portfolio manager and Quantum Economics founder, points out, how things play out with this bug is almost entirely beside the point. “The bigger issue is — can it happen again?” he said.

Compound is the world’s fifth-largest DeFi protocol with a total value locked of $10.3 billion, according to DeFi Llama, which provides ranking and metrics for DeFi protocols.

Greenspan said the protocol can easily absorb this loss and a lot of it will likely be returned, “but the larger issue would be if people lose confidence in the system’s ability to function properly.”

Gupta said one immediate problem is that the Comptroller account has given away comp tokens that were reserved for future rewards.

You can think of Comptroller as the heart of Compound, Gupta explained. It facilitates all core features like borrowing, lending, and rewarding.

Comptroller oversees the pool of cash used to pay rewards to users who provide their crypto to borrowers at a set interest rate, which is typically a single-digit APY.

“Future rewards might have to be reduced to make Comptroller solvent,” said Gupta.

Continue Reading

Technology

Buy now, pay later lender Klarna files for U.S. IPO

Published

on

By

Buy now, pay later lender Klarna files for U.S. IPO

Pedestrians walk by an advertisement for Klarna.

Daniel Harvey Gonzalez | In Pictures via Getty Images

Klarna, a provider of buy now, pay later loans filed its IPO prospectus on Friday, and plans to go public on the New York Stock Exchange under ticker symbol KLAR.

Klarna, headquartered in Sweden, hasn’t yet disclosed the number of shares to be offered or the expected price range.

The decision to go public in the U.S. deals a significant blow to European stock exchanges, which have struggled to retain homegrown tech firms. Klarna CEO Sebastian Siemiatkowski had hinted for years that a U.S. listing was more likely, citing better visibility and regulatory advantages.

Klarna is continuing to rebuild after a dramatic downturn. Once a pandemic-era darling valued at $46 billion in a SoftBank-led funding round, Klarna saw its valuation slashed by 85% in 2022, plummeting to $6.7 billion in its most recent primary fundraising. However, analysts now estimate the company’s valuation in the $15 billion range, bolstered by its return to profitability in 2023.

Revenue last year increased 24% to $2.8 billion. The company’s operating loss was $121 million for the year, and adjusted operating profit was $181 million, swinging from a loss of $49 million a year earlier.

Founded in 2005, Klarna is best known for its buy now, pay later model, a service that allows consumers to split purchases into installments. The company competes with Affirm, which went public in 2021, and Afterpay, which Block acquired for $29 billion in early 2022. Klarna’s major shareholders include venture firms Sequoia Capital and Atomico, as well as SoftBank’s Vision Fund.

Continue Reading

Technology

Shares of DocuSign surge 14% on strong earnings, AI boost

Published

on

By

Shares of DocuSign surge 14% on strong earnings, AI boost

DocuSign CEO Allan Thygesen on Q4 results, launch of DocuSign IAM and growth outlook

Docusign rose more than 14% after reporting stronger-than-expected earnings after the bell Thursday.

“We’ve really stabilized and I think started to turn the corner on the core business,” CEO Allan Thygesen said Friday on CNBC’s “Squawk Box.” “We’ve become much more efficient.”

Here’s how the company performed in the fourth quarter FY2025 compared to LSEG estimates:

  • Earnings per share: 86 cents vs. 85 cents expected
  • Revenue: $776 million vs. $761 million

The earnings beat was boosted in part by the electronic signature service’s new artificial intelligence-enabled content called Docusign IAM, a platform for optimizing processes involving agreements.

“It’s tremendously valuable,” Thygesen said. “It’s opening a treasure trove of data. … We’re seeing excellent pickup.”

Looking to fiscal year 2026, Thygesen said Docusign expects IAM to account for low double digits of the total growth of the business by Q4.

Read more CNBC tech news

Thygesen said the company is also partnering with Microsoft and Google, which the company does not view as competitors because they’re “not looking to become agreement management specialists.”

Despite consumer sentiment and demand dipping across the board due to tariff uncertainty, Thygesen said the company has not seen anything yet in its transactional activity to indicate a slowdown in demand or growth.

“More and more people are going to want to sign things electronically,” Thygesen said.

The company reported subscription revenue at $757 million, marking a 9% year-over-year increase. Docusign said it expects first-quarter revenue between $745 million and $749 million and projects full-year revenue between $3.129 billion and $3.141 billion.

Docusign reported net income of $83.50 million, or 39 cents per share, compared to net income of $27.24 million, or 13 cents per share, a year ago. Fourth-quarter revenue of $776 million was up 9% from the year-ago quarter.

DocuSign went public in 2018 at a $6 billion valuation. The company’s share price soared during the pandemic as demand for remote services boomed during lockdowns and social restrictions, hitting record highs in 2021 before plummeting. Thygesen, who previously worked at Google, joined the company in September 2022 after DocuSign’s massive slide.

The stock is down more than 16% year-to-date.

Continue Reading

Technology

Tech’s 3-week sell-off, led by Tesla, wipes out $2.7 trillion in value from megacaps

Published

on

By

Tech's 3-week sell-off, led by Tesla, wipes out .7 trillion in value from megacaps

Less than two months ago, the tech industry’s top leaders flocked to Washington, D.C., for the presidential inauguration, part of an effort to strike a friendly tone with President Donald Trump after a contentious first go-round in the White House.

Thus far, they’ve avoided any nasty social media posts from the president. But their treatment by investors has been anything but warm.

Over the last three weeks, since the Nasdaq touched its high for the year, the seven most valuable U.S. tech companies — often called “the Magnificent Seven” — have lost a combined $2.7 trillion in market value. The sell-off has pushed the Nasdaq to its lowest level since September.

As of Thursday, the tech-heavy index was down 4.9% for the week, heading for its worst weekly performance in six months. If it ends up down more than 5.8%, it would be the steepest weekly drop since January 2022.

Sparking the downdraft was President Trump’s promise to slap high tariffs on top trading partners, including China, Mexico and Canada, along with mass firings of government workers. The combination of a potential trade war and rising unemployment is particularly troubling news for consumer and business spending and has raised fears of a recession.

Additionally, many technology companies import key parts from abroad, and rely on trade partners for manufacturing.

This isn’t what Wall Street was expecting.

Following Trump’s election victory in November, the market jumped on prospects of diminished regulation and favorable tax policies. The Nasdaq climbed to a record close on Dec. 16, capping a more than 9% rally over about six weeks after the election.

Since then, electric car maker Tesla has lost close to half its value, despite — or perhaps because of — the central role that CEO Elon Musk is playing in the Trump administration.

The Nasdaq’s high point for the year came on Feb. 19, about a month into Trump’s second term. But it finished that week lower and has continued its precipitous decline.

Here’s how the seven megacaps have fared over that stretch:

Apple, the world’s most valuable company and the only remaining member of the $3 trillion club, has lost $529 billion in market cap since the close on Feb. 19. The iPhone maker is down 17%.

Microsoft, which was previously worth over $3 trillion, has fallen by $267 billion in the past three weeks, a drop of close to 9% for the software giant.

Nvidia, the chipmaker that’s been the biggest beneficiary of the artificial intelligence boom, also slid below $3 trillion over the course of losing $577 billion in value, the biggest dollar decline in the group. Like Apple, the stock is down 17% since the Nasdaq peaked.

Amazon is down by $347 billion, falling by 14%, while Alphabet is off by $275 billion after a 12% decline. Meta has shed $286 billion in market cap, a 16% drop.

Tesla has seen by far the biggest percentage decline at 33%, equaling $386 billion in value.

Goldman Sachs on Wednesday referred to the group as the “Maleficent 7.” Chief U.S. equity strategist David Kostin noted that the basket now trades at its lowest valuation premium relative to the S&P 500 since 2017. Goldman cut its price target on the benchmark index to 6,200 from 6,500. The S&P 500 closed on Thursday at 5,521.52.

“We believe investors will require either a catalyst that improves the economic growth outlook or clear asymmetry to the upside before they try to ‘catch the falling knife’ and reverse the recent market momentum,” Kostin wrote.

Continue Reading

Trending