Update Bricked CETH Market—7-Day Vote To Fix It

The compound's governance proposal to update pricing feeds includes a programming issue.

The coding error has “temporarily frozen” the Compound ETH (cETH) market, causing cETH transactions to reverse, however Compound Labs indicated that “funds are not immediately at risk” despite the front end not operating.

On Aug. 31, Compound Labs reported that the code bug came from Proposal 117: Compound Oracle Upgrade v3, which was implemented two hours earlier to update the Compound protocol's oracle contracts to use Uniswap V3 instead of V2 for price feeds.

Compound Labs announced Proposal 119: Oracle Update would restore the price feed when the cETH market froze.

The new proposal was prepared less than an hour following Proposal 117, but it must undergo a seven-day governance procedure before taking effect.

According to OpenZeppelin Security Solutions Architect Michael Lewellen, the "getUnderlyingPrice" function did not update the price of cETH tokens, returning empty bytes and reverting the request.

Lewellen added:

A local news article says the South Korean central bank will authorize ICOs under the Digital Assets Framework Act.

The new governance plan will fix the cETH market's current outage.

No monies are at danger. All cToken markets on Compound V2 and V3 work.”

“Any users that deposited ETH and acquired cETH for initiating borrow positions must be informed that they might get promptly liquidated whenever the fix proposal runs if by that time the price of ETH has decreased significantly,” Lewellen warned.

Compound Labs CEO Robert Leshner said that users can settle debt and add collateral to avoid liquidation.

Despite three smart contract auditing organizations, including OpenZeppelin and ChainSecurity, reviewing Compound's oracle contract, Compound Labs found a code issue.

Proposal 117 was uncontroversial, receiving 696,665 votes from 245 wallet addresses in favor of the price feed improvement.

Polychain Capital had the most votes (306,146) for the proposition.

DeFi Llama ranks Compound as the third-largest decentralized lending network, with $2.67 billion locked (TVL).

COMP, priced at $48.27, is unaffected by the news.