Compound cETH market bricked by update — 7-day wait on vote to fix it

Decentralized lending platform Compound has been suffering from a code bug in a latest governance proposal to replace its value feeds. 

The code error has “briefly frozen” the Compound ETH (cETH) market, inflicting cETH transactions to revert, however Compound Labs said that regardless of the entrance finish not working, “funds will not be instantly in danger.”

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Compound Labs introduced on Aug. 31 that the code bug got here from Proposal 117: Compound Oracle Improve v3, which was carried out a few hours in the past to replace the oracle contracts on the Compound protocol to a brand new model that makes use of Uniswap V3 as a substitute of V2 for value feeds.

An hour in the past, Proposal 117 was executed, which up to date the worth feed that Compound v2 makes use of.

This value feed, whereas audited by three auditors, contained an error that’s inflicting transactions for ETH suppliers and debtors to revert.https://t.co/a2DFk7h0ET

— Compound Labs (@compoundfinance) August 30, 2022

In response to the cETH market briefly freezing, Compound Labs mentioned it aimed to revert to the earlier value feed through Proposal 119: Oracle Replace. The brand new proposal was created lower than one hour after Proposal 117 had been executed, nonetheless it now must undergo  seven-day governance course of earlier than taking impact.

In accordance with an update from Safety Options Architect Michael Lewellen of OpenZeppelin, the code bug got here from the “getUnderlyingPrice” perform, which didn’t replace the worth of cETH tokens, which might return empty bytes and trigger the decision to be reverted.

Learn the next put up for particulars on a Compound incident we’re working to resolve for the cETH market. A repair is already underway and no funds are in danger at the moment. The remainder of the cToken markets on Compound V2 and all of V3 stay practical.https://t.co/CiSE3a99Wa

— OpenZeppelin (@OpenZeppelin) August 30, 2022

Lewellen additionally reaffirmed that no funds are in danger:

“The first subject proper now could be a brief denial of service for the cETH market which might be resolved by the brand new governance proposal. No funds are in danger at the moment. The remainder of the cToken markets on Compound V2 and all of V3 stay practical.”

Nevertheless, Lewellen added that “any customers that deposited ETH and obtained cETH for opening borrow positions have to be conscious that they may get immediately liquidated at any time when the repair proposal executes if by that point the worth of ETH has dropped considerably.”

However the CEO of Compound Labs Robert Leshner additionally added that customers can nonetheless repay any debt and add collateral to keep away from liquidation.

Associated: What is a great contract safety audit? A newbie’s information

Compound Labs famous the code bug got here regardless of the oracle contract being audited from three separate good contract auditing corporations, with OpenZeppelin and ChainSecurity among the many latest corporations to have audited Compound’s good contracts.

Proposal 117 itself didn’t seem like a controversial one, with all 696,665 votes from 245 completely different pockets addresses in favor of the worth feed improve. Crypto funding agency Polychain Capital solid probably the most votes (306,146) in favor of the proposal.

In accordance with DeFi Llama, Compound is the third largest decentralized lending platform, with $2.67 billion whole worth locked (TVL). The information has not affected the Compound token, COMP, to this point which is at present priced at $48.27.