The head of Gitcoin’s project has confessed to a substantial error leading to the loss of roughly $460,000 in Gitcoin (GTC) tokens. The debacle unfolded when funds earmarked for a proposal involving merchandise, memes, and marketing expenses mistakenly found their way to an irretrievable contract address instead of the intended multi-signature address.
This revelation came to light on October 6th through discussions on the GTC governance forum. The treasury sourced the intended transfer to fortify a proposal but left 521,440 GTC tokens entangled in a contract due to the misrouting.
At the time, GTC’s value was shy of $0.90, amplifying the loss to an estimated $461,000. They attempted to engage Gitcoin core developers for potential solutions such as a withdrawal function or an upgrade. However, it was definitively established that recovering the funds was an insurmountable challenge.
Mitigating Future Risks: Gitcoin’s Response and Plans
In response to this unfortunate incident, Gitcoin has plans to avert future errors and institute a more transparent accountability structure. The project lead underscored the obligation of major token holders and multi-signature signers to exercise heightened vigilance when dealing with funds not directly under their ownership.
Umar Khan, a Gitcoin researcher, proposed an alternative viewpoint. He suggested viewing the lost tokens as a reduction in GTC supply, not a depletion of treasury funds.
Observers have pointed out that this occurrence spotlights challenges within the crypto space’s user experience, underscoring the pressing need for enhancements.
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, renowned for funding Web3 developers engaged in open-source projects, witnessed a 2.1% dip in the price of GTC over the past 24 hours, with the token trading at $0.889 at the time of writing.
The token’s value has plummeted by a staggering 99% since its peak at $89.62 in May 2021, a dramatic decline as reported by CoinGecko. This sharp drop reflects a significant shift in market sentiment and raises questions about the token’s future prospects and the factors contributing to this drastic decline.