Degen Chain User Losses 90% of Funds During a Bridge Transfer

A Degen Chain user lost 90% of funds during a bridge transfer to Base an Ethereum L-2 protocol, sparking criticism against the layer-3 blockchain.

The user, identified as Tempe.degen, reported the loss of DEGEN tokens valued at approximately $5,000 during the bridge transfer. According to the protocol's report, this loss resulted from an internal system bug on July 16.

Degen Chain Reacts to Lost Funds

In athread on X, Degen Chain acknowledged that a user lost 90% of funds during a transfer from their blockchain to Base. The protocol blames the loss on a system bug.

1/3 One of our users lost almost 90% of their funds during a bridge transfer from Degen Chain to Base. Bugs like this should never happen, especially when user funds are involved. If you've faced a similar problem, we'll create a form to ensure everyone gets refunded. pic.twitter.com/dcW52FqJS3

- Degen (@degentokenbase) July 16, 2024

Degen Chain says bugs like this should never happen, especially when it involves users' funds. Degen's team says it will create a form to ensure that all users who faced similar problems receive refunds for their lost tokens.

Also, Degen Chain blamed its security issues on the terrible service it received from its providers.The developers believe apologies are insufficient for outages and users suffering losses, especially when the providers claim to be specialists.

2/3 Degen L3 is in a tough spot. We've received terrible service from our providers, and apologies aren't cutting it. Outages and lost user funds are unacceptable, especially from companies claiming to specialize in this.

- Degen (@degentokenbase) July 16, 2024

According to the post, a service provider performed an upgrade that Degen Chain never requested. This upgrade caused significant issues for users on the Layer-3 blockchain.

There's a good deep dive here: https://t.co/FF3O43KgSc. But yeah, there's more to the story. Another service provider did an upgrade we never asked for, causing major issues for our users. We had to find out from our users, not the providers. It's time to make some changes.

- Degen (@degentokenbase) July 16, 2024

Degen Chain still shared the blame for not addressing the security issues sooner but promised to make changes. However, the developers believe that the process will not be quick and will likely take weeks, but it will produce positive results.

3/3 We take part of the blame for not addressing these issues sooner, but enough is enough. We're doing a major shake-up in the coming weeks to ensure we get the best service possible. This won't be a quick fix, but we will turn things around. Apologies to everyone affected.

- Degen (@degentokenbase) July 16, 2024

Investors Trust Likely Affected by Losses as User Offers Solutions

Meanwhile, some investors were displeased with the events despite Degen Chain's best efforts at damage control and possible solutions. According to Kevang30.degen.eth, it hurts to suffer such a loss. He advised users not to trust routine processes since they might sometimes have errors.

Also, the affected user Tempe.degen urged users to be careful when using the Degen Chain Bridge.

The user attempted to increase the locked DEGEN in the vault and bridged 900,000 DEGEN tokens in two transactions. He only received about 115,000 DEGEN back on Base. He noted that the transaction, which was supposed to take seven days, concluded in a few minutes.

Also, the user admitted that he didn't conduct proper research before the bridging and expected to receive the same amount.

Tempe.degen provided possible solutions to fix this error. He suggested three major changes to the User Interface (UI) for better results.

First, the seven-day waiting period alert must be removed since it is incorrect and misleading to users. Secondly, the maximum slippage value for the bridging is incorrect since it misleads users to think it is 1%.

Finally, Tempe.degen suggested that the swap button be disabled if the slippage exceeds 5%. To protect their funds, users will have to manually select a higher slippage percentage.

Similarly, in May, Degen Chain refunded3.6 million DEGEN tokens to users of the Reservoir0x relay bridge. These users lost their funds due to an outage on the Degen Chain, which created concerns about its transfer reliability.

We've refunded 3.6M $DEGEN to users of the @reservoir0x Relay bridge who lost funds due to the Degen chain outage. We're committed to continuing our support for everyone affected by the outage!

- Degen (@degentokenbase) May 23, 2024

The post Degen Chain User Losses 90% of Funds During a Bridge Transfer appeared first on The Tech Report.