A Convex smart contract failure forced the development team to pre-release most of its circulating supply of tokens, sending the market into turmoil.
In one post Office Taking to Twitter on Friday, the development team at Convex Finance wrote that they have reimplemented the contracts responsible for the voting lock management mechanism detect The vulnerability could grant unreasonable rewards to some users.
“Prior to the implementation of the new vlCVX contract, nobody was affected by this vulnerability. However, since Convex Finance contracts are immutable and not updatable, a new contract had to be implemented. The new vlCVX contract already provides a solution to this potential vulnerability in the future.”
It is the latest example of the dangerously experimental nature of DeFi, a $200 billion industry where supply shocks, smart contract failures and volatile prices are the order of the day.
Convex’s voice blocking mechanism is key to the project’s token economy, allowing users to collect “bribes” from the protocols and transfer liquidity directly into the Curve Finance protocol, but only usable if users have their tokens for 16 weeks lock out.
This mechanism plays an important role in the complex, multi-layered battle for voting control in the Curve Finance (CRV) protocol token, commonly known as “Curve Wars”.
The vote blocking mechanism also plays an important role in managing CVX’s circulating supply, with more than 72% of previously blocked supply. CVX retailers often keep track of key release dates as these can cause supply and price fluctuations.
As a result, the sudden, unexpected unlocking of millions of unlocked tokens on Friday led to a massive supply shock, causing the CVX price to fall by as much as 20% from $19.10 to $15.22 in a matter of hours.
However, large holders have engaged in token accumulation, and many users have chosen to lock up their tokens rather than take the opportunity to sell them, even at a time of macroeconomic uncertainty due to the war in Ukraine.
Investor Matt Casto said some whale addresses signed up to buy $2.5 million worth of CVX tokens.
As the buyers with the best fill minutes (filtered for purchases over $100,000) also re-enter positions, this address bought CVX about $2.5m about $30 ago. https://t.co/pyO19oWVxo pic.twitter.com/zBkoLhNKtu
— Matt Casto (@mcasto_) March 4, 2022
Although volatile, CVX price is currently trading around $17.10, down about 10% in the last 24 hours.
CVX Price Chart | Source: TradingView
Join Bitcoin Magazine Telegram to follow news and comment on this article: https://t.me/coincunews
Synthetic Team Cuong
According to Coindesk