A bug in the code swept the cETH market and marred the Compound user’s appearance, but the CEO confirmed that “funds are not at immediate risk.”
The decentralized lending platform Compound has encountered a code error in a recent government-proposed proposal to update pricing channels.
A code bug has “temporarily frozen” the Ether (cETH) market, causing cETH trades to be canceled, but Compound Labs said that despite the front-end outage, “funds are not immediately at risk.”
Compound Labs announced on Wednesday that the bug in the code is due to Proposition 117: Compound Oracle Upgrade v3, which was implemented a few hours ago to upgrade the Oracle contracts in the Compound protocol to a new version called Uniswap V3 used instead of V2 for price channels. .
In response to the temporary cETH market freeze, Compound Labs said it intends to revert to the previous price feed through Proposition 119: Oracle Update. The new proposal was created less than an hour after Proposal 117 was implemented, but now has to go through a seven-day governance process before it becomes effective.
According to an update by OpenZeppelin’s security architect Michael Lewellen, the bug in the code was due to the getUnderlyingPrice function not updating the price of cETH tokens, which would return empty bytes and cause the call to abort.
Lewellen also confirmed that no funds are at risk:
“The main issue right now is the temporary denial of service for the cETH market, which the new governance proposal will solve. No funds are currently at risk. The remaining cToken markets on Compound V2 and all V3 remain operational.”
However, Levellen added: “All users who have deposited ETH and received cETH to open loan positions should be aware that if a firm offer is made, they can be liquidated immediately if the price of ETH by then falls significantly.” “.
However, Compound Labs CEO Robert Leshner added that users can still pay off debt and add collateral to avoid liquidation.
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Compound Labs found that the bug in the code appeared even though the oracle contract was reviewed by three separate smart contract review firms, with OpenZeppelin and ChainSecurity being among the most recent companies to review compound smart contracts.
Proposition 117 did not seem controversial on its own: all 696,665 votes from 245 different wallet addresses were in favor of updating the price feed. Cryptocurrency investment firm Polychain Capital cast the most votes (306,146) for the proposal.
According to DefiLlama, Compound is the third largest decentralized lending platform with a combined value of $2.67 billion (TVL). This news has not yet affected Compound (COMP), which is $48.27 at the time of writing.