Moonwell releases official statement on oracle mismatch incident, governance proposal for fix is planned to be launched

The DeFi lending protocol Moonwell released an official statement following approximately $1.78 million in bad debt caused by an oracle configuration error. The statement confirmed that a serious error in one oracle configuration led to the system not calculating the cbETH price as expected through cbETH/ETH × ETH/USD, but instead only using the cbETH/ETH exchange rate. This resulted in the cbETH price being approximately $1.12 instead of the actual market price of about $2200. The attacker only needed to repay about $1 in debt to liquidate 1 cbETH, causing a large number of borrowers' collateral assets to be liquidated and resulting in significant bad debt. In total, 1096.317 cbETH was liquidated, most of which was bad debt valued in cbETH.

As the oracle fix requires a five-day governance voting and time-lock process, liquidations are still ongoing during this period. A related governance proposal for the fix is planned to be launched.