Compound CETH Market Blocked By Update—7-Day Vote Delay To Restore Access

A code bug in a recent governance proposal to update Compound's price feeds has been a problem for the decentralized lending platform.

The code error has "temporarily frozen" the Compound ETH (cETH) market, which has caused cETH transactions to be reversed. However, Compound Labs said that even though the front end isn't working, "funds are not immediately at risk."

Compound Labs said on August 31 that the code bug came from Proposal 117: Compound Oracle Upgrade v3, which was just put into place to update the oracle contracts on the Compound protocol to a new version that uses Uniswap V3 instead of V2 for price feeds.

In response to the cETH market freezing for a short time, Compound Labs said it planned to switch back to the old price feed through Proposal 119: Oracle Update.

Less than an hour after Proposal 117 was put into action, the new proposal was made. However, it needs to go through a seven-day governance process before it can go into effect.

OpenZeppelin's Security Solutions Architect Michael Lewellen said in an update that the code bug was caused by the "getUnderlyingPrice" function, which did not update the price of cETH tokens. This caused the function to return empty bytes, which caused the call to be canceled.

Lewellen also said again that no money is in danger:

A local news report says that the central bank of South Korea has said that the Digital Assets Framework Act will allow initial coin offerings (ICOs).

"The main problem right now is that the cETH market is temporarily out of service. The new governance proposal will fix this problem."

At the moment, no money is in danger. All of the other cToken markets on Compound V2 and all of V3 are still working.

But Lewellen said, "Any users who deposited ETH and got cETH to open borrow positions should know that they could be liquidated instantly if the price of ETH has dropped a lot by the time the fix proposal goes into effect."

But Robert Leshner, the CEO of Compound Labs, also said that users can still pay back any debt and add collateral to keep the company from going out of business.

Compound Labs said that the code bug happened even though the oracle contract had been checked by three different smart contract auditing companies, including OpenZeppelin and ChainSecurity.

The price feed upgrade in Proposal 117 didn't seem to be controversial, since all 696,665 votes from 245 different wallet addresses were in favor of it.

The proposal got the most votes (306,146) from the crypto investment firm Polychain Capital.

DeFi Llama says that Compound is the third largest decentralized lending platform, with a total value locked up of $2.67 billion (TVL).

So far, the news hasn't changed the price of the COMP token, which is $48.27 at the moment.

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