Degen Chain User Loses 90% of Funds, Users In Trouble?
Highlights
- A user lost 785,000 DEGEN in a cross-chain transaction.
- This was sparked by slippage caused by low liquidity.
- The platform has taken full responsibility assuring users of a refund.
A Degen Chain user has lost 90% of his assets totaling 785,000 DEGEN due to a spillage difference in cross-chain transactions. The transaction of DEGEN from the chain to Base encountered issues as a result of poor liquidity in previous chain transactions. The incident sparked reactions from the crypto community as security incidents continue to dampen sentiments.
DEGEN Chain User Loses Assets
A Farcaster user, Tempe.degen lost 90% of assets while using the Bridge. Before cross-chain transactions occur from DEGEN to Base the asset must be converted to ETH on the DEGEN Chain. Subsequently, the asset moves to Base and is reconverted to DEGEN before being sent to the user addresses.
Tempe.degen highlighted that the chain didn’t use the right bridge and the user interface was confusing. The issue arose from the DEGEN/ETH pool as there was a scarcity of ETH spurring the slippage. Poor liquidity is a major problem for some pools as DeFi founders look for ways to improve the situation across the board. Crypto enthusiasts pointed out that losses coming out cross cross-chain transactions can hinder growth.
This is linked to low sentiments due to related development. As crypto adoption grows, investors set sights on wider growth built on market confidence.
Platform Takes Full Responsibility
Meanwhile, in a swift reaction, the company acknowledged the incident noting that bugs like these should never happen within the system while assuring affected users of a full refund.
“One of our users lost almost 90% of their funds during a bridge transfer from Degen Chain to Base. Bugs like this should never happen, especially when user funds are involved. If you’ve faced a similar problem, we’ll create a form to ensure everyone gets refunded.”
3/3 We take part of the blame for not addressing these issues sooner, but enough is enough. We’re doing a major shake-up in the coming weeks to ensure we get the best service possible. This won’t be a quick fix, but we will turn things around. Apologies to everyone affected.
— Degen 🎩 (@degentokenbase) July 16, 2024
Furthermore, the platform highlighted the terrible service from providers while taking responsibility and assuring the community of changes. These changes will include a shake-up in the coming weeks to get the best service possible.
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