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This Compound exploit allows users to 4x their initial capital—using their borrowed amounts

An exploit on Compound is allowing users to leverage their initial capital multifold, creating more Compound DAI than real DAI, and a situation that some are terming impossible.

This Compound exploit allows users to 4x their initial capital—using their borrowed amounts

Photo by Roman Synkevych on Unsplash

An exploit on Compound is allowing users to leverage their initial capital multifold, creating more Compound DAI than real DAI, and a situation that some are terming impossible.

This is not a security lapse or bug in the Compound protocol, but a sneaky loophole that makes borrowing against borrowed collateral possible.

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