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The leader of Gitcoin’s project admitted that a significant error resulted in the loss of around $460,000 worth of Gitcoin (GTC) tokens. This mistake occurred when the funds were mistakenly sent to an unrecoverable contract address instead of their intended destination. The incident was detailed on the GTC governance forum on October 6th.
Originally, the transfer of GTC from the treasury was meant to support a proposal for merchandise, memes, and marketing expenses. Unfortunately, instead of going to a multi-signature address as planned, the funds ended up in a GTC token contract. This effectively trapped the funds in the contract with no way to retrieve them.
A total of 521,440 GTC tokens were lost during this mishap. At the time, the token was trading at just under $0.90, resulting in an estimated loss of approximately $461,000. Gitcoin core developers were contacted in an attempt to explore options such as a withdrawal function or an upgrade, but it was confirmed that neither of these was feasible. Consequently, the funds were categorized as irretrievable.
Gitcoin’s Take on the Blunder
In response to this incident, the Gitcoin team has outlined plans to prevent such errors in the future and establish clearer accountability in case of similar incidents. The project lead emphasized the responsibility of large token holders and multi-signature signers to exercise extra caution when handling funds that do not belong to them.
Gitcoin researcher Umar Khan suggested that the DAO could view the lost tokens as a reduction in GTC supply rather than a loss of treasury funds.
Observers noted that this incident highlights issues with the user experience in the crypto space, indicating that improvements are needed.
It seems that @gitcoin mistakenly sent ~521k $GTC (~$471k) to the token address instead of funding a workstream address
That is really sad to see. Effectively burning half a million $
How come none of the voter/signer noticed? Crypto UX is sadly really broken if this can happen pic.twitter.com/DhI7lPaViY
— Lefteris Karapetsas | Hiring for @rotkiapp (@LefterisJP) October 7, 2023
Gitcoin is a platform designed to fund Web3 developers seeking open-source projects. Project creators and developers can publish their projects, while donors can browse and select projects to support. The price of GTC has seen a 1.1% decline over the past 24 hours and was trading at $0.889 at the time of this report. Furthermore, the token has dropped by a substantial 99% since reaching its all-time high of $89.62 in May 2021, according to CoinGecko.
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