The decentralized finance (DeFi) industry continues to grow at a cosmic pace, but in inexperienced hands, these tools are dangerous and unreliable. There are a million confirmations. In this case, a million USDT lost.
A tweet dated September 8 states that a user sent $ 1 million worth of Tether (USDT) to the wrong address.
Swerve.Finance is a fork of the Curve DeFi protocol. The project offers a pool of liquidity on the Ethereum blockchain and is intended for trading stablecoins. Our unlucky user tried to deposit funds to Swerve, but sent the money directly to the project management contract.
It’s like sending an email to an automated address. Only in this case, the message that the letter has not been delivered does not come. Moreover, as soon as the user clicks the “send” button, the money no longer belongs to him.
Such a transaction can be canceled only if such a function is prescribed in the smart contract. But Swerve does not have it registered, so USDT deposited to this address is lost forever.
However, shortly after the incident, Tether CTO Paolo Ardoino promised to return the funds. He asked the user to open a corresponding ticket in the Tether support service and added that if the funds were in ERC20 format, then they can be returned.
In this case, the user simply provides proof that the coins have burned out, and Tether will compensate this amount.
Binance founder Changpeng Zhao noted that the exchange plans to create a security system that will prevent similar errors in the future.
This is not the first time that someone has funneled funds from a liquidity provider directly into a management contract. For example, on August 30, the Gate.io exchange made the same mistake with SushiSwap, which cost it $400,000.