The Compound CETH Market Has Been Blocked By An Update

The Compound CETH Market Has Been Blocked By An Update — A 7-Day Wait For A Vote To Fix

A programming fault in a recent governance proposal to alter the Compound's price feeds has affected the decentralized lending platform.

The coding bug has "temporarily stopped" the Compound ETH (cETH) market, causing cETH transactions to reverse, but Compound Labs has claimed that "funds are not immediately at risk" 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.

Compound Labs stated that it intended to revert to the prior price feed via Proposal 119: Oracle Update in response to the cETH market briefly freezing.

The new proposal was produced less than an hour after Proposal 117 was executed, but it must now go through a seven-day governance process before it can take effect.

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

Lewellen further stated that no monies are in jeopardy:

According to a local news report, the South Korean central bank has stated that initial coin offerings (ICOs) will be permitted under the Digital Assets Framework Act.

"Right now, the primary issue is a temporary denial of service for the cETH market, which will be addressed by the new governance proposal."

At this moment, no funds are at danger. The rest of the cToken marketplaces on Compound V2 and V3 are still operational."

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 executes if the price of ETH has plummeted significantly by that time."

But, according to Compound Labs CEO Robert Leshner, consumers can still repay any debt and add collateral to avoid 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, who were among the most recent firms 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 favor of the price feed improvement.

Polychain Capital, a cryptocurrency investment firm, 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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