Compound DAI Liquidation Incident

What happened

On November 26, 2020, a DAI price spike on Coinbase Pro triggered large liquidations on Compound. A subsequent community proposal reported 85.2 million DAI liquidated. This figure measures liquidation volume, not stolen funds or attacker profit.

The available evidence does not establish whether the price spike was deliberate manipulation.

Technical root cause

An abnormal oracle price triggered liquidations of DAI borrowers. The cited governance discussion does not identify a proven attacker or a contract drain.

How it happened

1. Coinbase Pro reported DAI at approximately $1.30. Compound used Coinbase Pro and Uniswap data in its oracle system.
2. The higher DAI price increased the measured value of DAI debt, making affected borrowers eligible for liquidation.
3. Liquidators acted through the protocol, producing the reported 85.2 million DAI liquidation volume.
4. Governance rejected the original compensation proposal. In June 2021, Compound adopted Chainlink feeds; a July community proposal renewed the compensation discussion.

Protocol details

Classification Borrowing and Lending

Protocol Type Exploit/Oracle Issue

Affected asset / contract COMP

Protocol links Website @compoundfinance

Evidence

• report Report archive.is
• analysis DAI Liquidation Event - Reintroducing the Compensation Proposal comp.xyz

Understand the attack patterns

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Oracle Manipulation & Price Manipulation