ParaSpace Contract Users Face Risks due to Liquidation Progress and Asset Extraction Glitches

03/17/2023 07:02 • AI & Tech Insights • 74 views

On March 17th, the Web3 Knowledge Map Protocol 0xscope tweeted, saying, “The ParaSpace contract is not working properly: 1. Users can extract more APEs than they thought. 2. User debt calculation errors have led to 268 liquidations in progress.” 0xscope reminded, “Extracting your assets requires you to assume your own risk.”

The contract failed before the ParaSpace protocol was suspended, allowing users to overdraw APE and causing a large number of incorrect clearing

Analysis based on this information:

The Web3 Knowledge Map Protocol 0xscope issued a warning on March 17th, stating that the ParaSpace contract was not functioning properly, and users were exposed to considerable risks. The 0xscope tweet mentioned two specific issues, including users extracting more assets than they anticipated and a glitch in the user debt calculation process. As a result of these problems, 268 liquidations were in progress, putting the contract’s participants in jeopardy.

The ParaSpace contract is a platform for users to invest and earn profits on their holdings through a system of automatic market-making algorithms. This enables users to earn interest and trade without having to find a counterparty to trade with. However, these automatic processes also create a set of risks that users need to be aware of. The recent glitches in the system have caused these risks to manifest in ways that jeopardize the users’ investments.

One of the specific risks that the 0xscope tweet highlighted was the fact that some users were able to extract more assets than they anticipated. This is an issue due to the automated nature of the platform, and users need to be aware that they are responsible for assuming their own risk when using such systems. As such, it is vital that users exercise caution on the platform and not rely entirely on the system’s automatic processes.

The other problem that the tweet identified was the glitch in the user debt calculation process that was leading to liquidation. When a user borrows funds on the platform, they need to maintain a certain collateral ratio, which ensures that they don’t default on their obligations. If the user’s ratio falls below a set level, the system automatically triggers liquidation, which sells their assets to cover their debt. However, the glitch in the debt calculation process has led to many users losing their investment through liquidation.

In conclusion, the Web3 Knowledge Map Protocol 0xscope has identified some severe glitches on the ParaSpace contract, leading to significant risks for the platform’s users. Participants on the platform need to understand the risks associated with investing in and using such complex systems. Additionally, it’s crucial that platforms such as ParaSpace ensure that their systems function correctly to mitigate such risks for users.

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