How much was lost in the Compound Labs hack?

The Compound Labs hack resulted in $89.0M in losses on November 26, 2020.

What attack technique was used in the Compound Labs exploit?

The Compound Labs exploit utilized Oracle Issue. Understanding this attack vector is critical for smart contract auditors and developers building secure DeFi protocols.

How can developers prevent similar smart contract attacks?

Preventing smart contract hacks requires a combination of secure coding practices, thorough security audits, and understanding common attack vectors like reentrancy, oracle manipulation, and access control flaws. Smart Contract Hacking (SCH) provides hands-on training to help developers and auditors identify and prevent vulnerabilities before deployment.

Compound Labs Hack

TOTAL LOST $89.0M

High #86 All-Time Nov 26, 2020 Oracle Issue ethereum

Affected Chain ethereum Incident surface

Recovered - No recovery reported

All-Time Rank #86 By amount stolen

Protocol Type Exploit/Oracle Issue Target category

Incident Overview

Quick Summary

Two big liquidations occurred on Compound Protocol due to the $DAI price spike.

Details of the Exploit

Compound is the lending protocol that also provides yield functionality. Around $89 million was liquidated on the protocol Compound due to the oracle issue, as far as Compound's oracle uses Coinbase for pricing data. The price of $DAI token spiked up to $1.3 on the Coinbase Pro exchange.

Since many of the loans were undercollateralized, they were liquidated.

Block Data Reference

$46 million liquidation transaction:

https://etherscan.io/tx/0x53e09adb…50f3e4

Address liquidated on $17.5 million in several transactions:

https://etherscan.io/address/0xb1adcedd…029484

This is classified as a Oracle Manipulation & Price Manipulation . Compare similar hacks →

Incident Report

Protocol / Project Compound Labs

Date of Incident November 26, 2020

Affected Chain(s) ethereum

Attack Technique Oracle Issue

Classification Borrowing and Lending

Primary Source View Post-Mortem

Protocol Information

Protocol Type Exploit/Oracle Issue

Affected Token COMP

Official Website compound.finance/

Protocol Twitter/X @compoundfinance

Team Anonymous

Source Code Unverified

Market Context at Time of Hack

Token Categories

DeFi Ethereum Ecosystem

Protocol Links

GitHub Discord Reddit

What the Attacker Needed to Succeed

Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.

Technical Knowledge Deep understanding of oracle issue and Solidity and EVM internals

Capital Required Seed capital to cover gas and initial position setup

On-Chain Access Ability to interact with ethereum smart contracts and deploy a custom exploit contract

Protocol Analysis Identification of the exploitable vulnerability in Compound Labs's contract logic - root cause: borrowing and lending

Execution Speed Precise transaction ordering and timing to exploit the vulnerability within a single atomic block

Obfuscation Plan A strategy to launder and move stolen funds - typically through mixers, cross-chain bridges, or decentralized DEX swaps to resist tracing

What Auditors Should Check

Could this have been caught in audit? Yes — skilled auditors routinely flag Oracle Issue vulnerabilities in code review

If you're auditing a protocol with similar architecture to Compound Labs, these are the critical security checks that could have prevented this incident (November 2020).

Verify all logic paths related to Oracle Issue are guarded by proper access controls and input validation - see the Oracle Manipulation & Price Manipulation attack class for patterns
Audit oracle price feeds for manipulation risks - ensure time-weighted average prices (TWAPs) or multi-source aggregators are used, not spot prices
Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs

Master these auditing techniques with hands-on labs and real exploit scenarios in the Smart Contract Hacking course.

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Related Attack Classes

The technique used in this hack maps to these vulnerability classes in our security curriculum:

See all Oracle Manipulation & Price Manipulation examples →

Oracle Manipulation & Price Manipulation

Sources & References

01
Source 1 https://archive.is/sF02c

Threat Assessment

Severity Level

HIGH

Attack Vector Oracle Issue
Root Cause Borrowing and Lending
Year 2020

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