- On Sunday, an Moonwell oracle error introduced in a pull request co-authored by Claude Opus 4.6 led to a significant exploit.
- The bug misreported cbETH’s price as ~$1.12 instead of ~$2,200, causing 1,096 cbETH liquidations and generating $1.78 million in bad debt.
- This marks the third oracle malfunction for the protocol in six months, collectively resulting in over $7 million in bad debt.
An oracle configuration error on Sunday inflicted a seven-figure loss on the Moonwell DeFi lending protocol by liquidating user collateral. The flaw, which originated in a code commit co-authored by AI model Claude Opus 4.6, misconfigured a critical price feed for the platform’s cbETH asset.
Specifically, the oracle incorrectly reported the price of cbETH as approximately $1.12 instead of its true market value of around $2,200. According to the project’s post-mortem, the error “wiped out most or all of the cbETH collateral for many borrowers.” Consequently, 1,096 cbETH was forcefully liquidated, saddling the protocol with $1.78 million of bad debt.
Monitoring systems detected the discrepancy, and supply caps were swiftly enacted to limit further damage. However, vulnerable existing positions continued to face liquidation. Meanwhile, the protocol’s governance process required a five-day delay before the faulty oracle could be formally corrected.
The incident underscores persistent issues, as Moonwell has now suffered three oracle malfunctions in the past six months. Security experts quickly weighed in, with Mikko Ohtamaa pointing out that automated tests should have caught the critical pricing error. The protocol’s total value locked now sits at roughly $90 million, a significant decline from its $380 million peak last year.
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