Compound cETH Market Is Bricked By An Update – 7-Day Wait Ensues

Compound cETH Market is bricked by an update that was made by a recent governance proposal to alter the pricing feed. Now, that update has affected the decentralized lending program.

The coding bug has “temporarily stopped” the Compound ETH (cETH) market, forcing cETH transactions to reverse, however, Compound Labs has claimed that “funds are not immediately at danger” despite the front end not operating.

Compound Labs revealed on August 31 that the code fault was caused by Proposal 117: Compound Oracle Upgrade v3, which was done just a few hours ago to update the Compound protocol’s oracle contracts to a new version that uses Uniswap V3 instead of V2 for price feeds.

Now Compound cETH Market is bricked by an update, and the big wait is on to try and fix it.

An hour ago, Proposal 117 was executed, which updated the price feed that Compound v2 uses.

This price feed, while audited by three auditors, contained an error that is causing transactions for ETH suppliers and borrowers to revert.https://t.co/a2DFk7h0ET

— Compound Labs (@compoundfinance) August 30, 2022

Compound Labs stated that it intended to return to the prior price feed via Proposal 119: Oracle Update in reaction to the cETH market briefly stopping. The new proposal was produced less than an hour after Proposal 117 was executed, but it must now go through a seven-day governance procedure before it can take effect.

According to an update from OpenZeppelin Security Solutions Architect Michael Lewellen, the code problem was caused by the “getUnderlyingPrice” function, which did not update the price of cETH tokens, resulting in empty bytes and the call being reversed.

Read the following post for details on a Compound incident we are working to resolve for the cETH market. A fix is already underway and no funds are at risk at this time. The rest of the cToken markets on Compound V2 and all of V3 remain functional.https://t.co/CiSE3a99Wa

— OpenZeppelin (@OpenZeppelin) August 30, 2022

Lewellen further stated that no funds are in jeopardy:

“The primary issue right now is a temporary denial of service for the cETH market which will be resolved by the new governance proposal. No funds are at risk at this time. The rest of the cToken markets on Compound V2 and all of V3 remain functional.”

Lewellen did add, however, that

“any customers that deposited ETH and acquired cETH for initiating borrow positions must be informed that these may be quickly liquidated if the fix proposal occurs if the price of ETH has plummeted sufficiently by that time.”

But, according to Compound Labs CEO Robert Leshner, consumers may still settle any debt and offer collateral to prevent liquidation.

Compound Labs reported that the coding flaw occurred despite the Oracle contract being reviewed by three independent smart contract auditing businesses, including OpenZeppelin and ChainSecurity, which were among the most recent organizations to evaluate Compound’s smart contracts.

Proposal 117 did not appear to be contentious, with all 696,665 votes cast from 245 distinct wallet addresses in support of the price feed improvement. Polychain Capital, a cryptocurrency investment business, received the most votes (306,146) in favor of the proposition.

Compound, according to DeFi Llama, is the third largest decentralized lending network, with a total value of $2.67 billion locked up (TVL). So far, the news has had no effect on the Compound token, COMP, which is now trading at $48.27.

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