Gitcoin Sends $460K to an Unrecoverable Address
Gitcoin faces setback as mistaken transfer results in loss of $461k worth of GTC tokens. Team takes proactive steps to prevent recurrence.
Gitcoin, a platform dedicated to funding Web3 builders seeking open-source work, recently faced a significant setback. On Oct. 6, project lead Coach Jonathan disclosed details of an unfortunate incident on the Gitcoin governance forum. The transfer, which was meant for a merchandise, memes, and marketing budget proposal, went wrong. Instead of reaching its intended multisignature address, the funds were mistakenly sent to a GTC token contract.
The mistaken transfer resulted in the loss of 521,440 GTC tokens. With the coin's value hovering just below $0.90 at the time, the total estimated loss amounted to around $461,000. The funds, now stuck in the contract, have been deemed irretrievable.
The transaction details and destination address.
After the transfer, Gitcoin's core developers were reached out to in order to investigate whether the contract had a withdrawal function or the possibility of being upgraded. It was verified that neither of these options was available, leading to the conclusion that the funds are now considered lost.
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
In response to this incident, Gitcoin's team has been proactive in addressing the issue and ensuring such mistakes don't recur. They have outlined plans to enhance their processes and establish clearer accountability mechanisms. CoachJonathan emphasized the responsibility that large token holders and multisig signers bear, especially when handling funds that aren't theirs.
“Large token holders and multisig signers have a responsibility to be extra diligent when it comes to handling funds that do not belong to them (myself included)”
Gitcoin researcher Umar Khan offered a different perspective on the forum, suggesting that the DAO could view the lost tokens as a reduction in GTC supply rather than a treasury fund loss.
Gitcoin's error isn't the first one. Such mistakes, whether due to human error or system flaws, have occurred in the past. For instance, Crypto.com once accidentally transferred $10.5 million to a client instead of a mere $100 refund.
Following the incident, GTC's price experienced a slight dip, falling 1.1% over the subsequent 24 hours. At the time of writing, it was trading at $0.883. It's worth noting that the token has seen a significant decline from its May 2021 all-time high of $89.62 reflecting a decrease of 99%.