How much was lost in the Compound V2 hack?

The Compound V2 hack resulted in $147M in losses on September 29, 2021.

What attack technique was used in the Compound V2 exploit?

The Compound V2 exploit utilized Math Mistake Exploit. 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 V2 Hack

TOTAL LOST $147M

Critical #59 All-Time Sep 29, 2021 Math Mistake Exploit ethereum

Affected Chain ethereum Incident surface

Recovered - No recovery reported

All-Time Rank #59 By amount stolen

Auditors 1 Prior security audit

Incident Overview

Compound is an algorithmic, autonomous interest rate protocol built for developers, to unlock a universe of open financial applications.

This is classified as a Arithmetic Overflows Underflows . Compare similar hacks →

Incident Report

Protocol / Project Compound V2

Date of Incident September 29, 2021

Affected Chain(s) ethereum

Attack Technique Math Mistake Exploit

Classification Protocol Logic

Primary Source View Post-Mortem

Protocol Information

Protocol Type Lending

Smart Contract Language Solidity

Official Website compound.finance

Protocol Twitter/X @compoundfinance

Market Context at Time of Hack

Token Categories

DeFi DAO Ethereum Ecosystem Yield Farming Coinbase Ventures Portfolio Three Arrows Capital Portfolio Polychain Capital Portfolio Avalanche Ecosystem

Protocol Links

GitHub Discord

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 math mistake exploit 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 V2's contract logic - root cause: protocol logic

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? Likely — with a thorough Math Mistake Exploit audit checklist and test coverage

Audited by Audit Report 1 — still lost $147M. Prior audits don't guarantee safety, especially after post-audit code changes.

If you're auditing a protocol with similar architecture to Compound V2, these are the critical security checks that could have prevented this incident (September 2021).

Verify all logic paths related to Math Mistake Exploit are guarded by proper access controls and input validation - see the Arithmetic Overflows Underflows attack class for patterns
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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Security Audit History

Audit Report 1 Report

Related Attack Classes

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

See all Arithmetic Overflows Underflows examples →

Arithmetic Overflows Underflows

Sources & References

01
Source 1 https://rekt.news/compound-rekt/

Threat Assessment

Severity Level

CRITICAL

Attack Vector Math Mistake Exploit
Root Cause Protocol Logic
Year 2021

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