Here is an update on the price feed issue for the cETH market. The fix proposal is still underway and expected to be executed in ~6 days.
As mentioned previously, users should be able to avoid any sudden liquidations caused by price changes once the fix proposal goes through by adding collateral or repaying borrowed assets. However, we’ve identified that some downstream protocols may not be capable of managing their positions at this time. For that reason, there may be a need to pause liquidations immediately before the proposal is executed to give these protocols time to adjust their positions.
OpenZeppelin has worked with Arr00 to prepare a proactive proposal that can be used to unpause liquidation IF the Pause Guardian decides that pausing is necessary. If market conditions do not change drastically and/or all positions are safe, then this will be unnecessary and the proposal will be canceled. We have also tested this proposal thoroughly to ensure it will work as intended since this will be the first time the unpause functionality may be used.
If the Pause Guardian does need to pause liquidations following the fix to protect some positions from unfair liquidations, this will only last for ~23 hours as the unpause proposal will reverse it shortly afterwards. Since this pause will impact all cToken markets, not just cETH, there are risks assumed by the protocol in case any other markets suffer a drop in price but it should be minor over the course of ~23 hours. If you are part of a protocol that is unable to manage positions or may otherwise be at risk of liquidations when price feeds turn on, please let us know in the community Discord.
We’ll continue to keep the community updated as we work with the Pause Guardian and other Compound participants to ensure the resolution is as smooth as possible. As we monitor the situation over the next week, we will also begin to work on a post-mortem that can be shared shortly after the fix is finalized.