Gitcoin, a leading crypto developer platform, has revealed that it lost roughly $460,000 worth of Gitcoin (GTC) tokens due to a transfer error that sent the funds to an unrecoverable contract address.
This incident occurred when GTC tokens were being transferred from the treasury for a merchandise, memes, and marketing budget proposal but mistakenly went to a GTC token contract. In total, 521,440 GTC tokens were lost in this unfortunate mishap. At the time of the incident, GTC was trading at just under $0.90 per token, resulting in an estimated financial loss of $461,000.
Project lead CoachJonathan disclosed the incident on the Gitcoin governance forum on October 6. He stated that despite efforts to investigate the possibility of withdrawing the funds or making upgrades to the contract, it was ultimately confirmed that the funds were unrecoverable.
Gitcoin has taken this incident as an opportunity to reinforce its security measures and to create more transparent accountability procedures in case of similar future incidents. CoachJonathan empharsized the importance of diligence among large token holders and multisignature signatories in handling funds not belonging to them.
Umar Khan, a Gitcoin researcher, suggested on the forum that the lost tokens could be considered a reduction in GTC supply rather than a loss of treasury funds.
Gitcoin, which supports open-source projects by connecting them with donors, has seen the price of its native token, GTC, decline by 1.1% in the last 24 hours, trading at $0.889 at the time of reporting. Additionally, the token has experienced a substantial drop of 99% from its all-time high of $89.62 in May 2021, according to data from CoinMarketCap. During its initial phase of development, Gitcoin was supported by Consensys, and received backing and support from DeFi and analytics firms such as Chainlink for its quadratic funding model (Gitcoin Grants).
While Gitcoin has faced a significant financial setback due to this mistake, it remains committed to improving its processes and security measures to prevent similar incidents in the future and to enhance the overall user experience for its community.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.