Compound’s Ether Market Currently Frozen Due to a Bug in an Upgrade

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Altcoins
Compound’s Ether Market Currently Frozen Due to a Bug in an Upgrade

Compound Proposal 117 was performed on August 30 at 6:20 PM UTC to upgrade the Oracle Contract to the latest version 3 that leverages Uniswap V3 rather than V2 for pricing feeds. It had been proposed by GFX Labs on behalf of ChainLink and had won a governance vote. Dedaub and ABDK, OpenZeppelin, examined the adjustments.

What Happened?

The trading on Compound Ether (cETH) is still temporarily suspended due to a code issue in the recent update to the decentralized finance (DeFi) lending protocol Compound, the platform announced on Twitter on August 30.

The governance proposal “117: Compound Oracle Upgrade v3” became live on Tuesday, according to the release, with the objective of changing the protocol to use price feeds from Uniswap V3. Despite the code having through three independent smart contract audits, a fault allowed providers and borrowers of cETH to have their transactions reversed, briefly blocking the market.

According to Compound’s post about the freeze, “The new governance approach would address the current main issue, which is a brief denial of service for the cETH market. There are currently no funds at risk. All of V3 and the remaining cToken marketplaces on Compound V2 are still operational.”

The Compound team presented a governance proposal within one hour after Proposal 117 was implemented, which would have restored the protocol to its earlier pricing feed. However, this procedure would take seven days to complete. Transactions involving cETH, which users receive when they deposit ETH to Compound, will be suspended until the patch is applied. The announcement appears to have had little impact on the price of COMP, the protocol’s native token since it has dropped by just 3% over the past 24 hours.

Most Members Supported the Upgrade

With 696,665 votes cast for the price feed improvement across 245 different wallet addresses, proposal 117 itself didn’t seem contentious. The proposal received the highest votes (306,146) in support from the cryptocurrency investment company Polychain Capital.

cETH is a cryptocurrency utilized in yield farming. Users receive cETH, which serves as their investment, in exchange for lending the pool their ETH. Compound, with a $2.67 billion total value locked, is the third-largest decentralized lending platform, according to DefiLlama (TVL). Compound (COMP), which is currently trading at $48.27, has not yet been impacted by the news.

A Week’s wait on Vote to Fix the Issue

Compound has created a new proposal 119 to restore the original price feed. This proposal, however, will only take effect after 7 days. Furthermore, Compound asserts that funds are not immediately at danger and that customers should still be able to add collateral, including Ether collateral. Due to this price difference, the interface is presently not loading, however it will soon resume functioning.

The getUnderlyingPrice function, according to Michael Lewellen, architect for OpenZeppelin Security Solutions, caused the problem. He said that because the value of cETH tokens had not been updated, it had reverted and returned empty bytes.