$337.22
-1.48%
$460.25
-0.61%
$0.003969
0.43%

Ethereum Declined By 5% as Maker DAO Discovered a Bug

ETH
-1.48%
MKR
-0.61%
NEWS
0.43%
bullish:
0
bearish:
1
Ethereum Declined By 5% as Maker DAO Discovered a Bug

The price of Ethereum has declined by almost 5 percent after the recent discovery of a bug capable of causing an integer overflow while computing with maximum debt at liquidation. Such integer overflow would lead to the reverting of that liquidation, according to Maker’s Gonzalo Balabasquer.

Balabasquer noted that this means large vaults in this configuration would not be vulnerable to liquidation, which is capable of disrupting the health of the protocol and the keeper ecosystem.

The way out is the adjustment of a smart contract parameter known as lump (also called Auction Lot Size) for ETH-A to 100 ETH. This will bring about a reduction in lot sizes from 500 ETH to 100 ETH and then make auction sizes smaller. If not, WBTC-ers will be getting free DAI in some situations.

Lump helps in determining the size of the auction lots in the process of liquidating collateral in the Maker Protocol. While providing further explanation, Balabasquer said the discovery does not have to do with the WBTC debt ceilings but with how the locked collateral and debt generated relates.

The effect of this discovery is such that for instance; there will be no liquidation now for a vault holding 500 ETH or less and 102,471 DAI debt if the price of ETH falls. Hence, the Governance Facilitators and the Maker Foundation Smart Contracts Team put up an executive vote to allow the community’s approval of the proposed modifications to the protocol.

The team asked the community whether they should increase the WBTC-A Debt Ceiling from $40 million to $80 million and reduce the ETH lump parameter from 500 ETH to 100 ETH. Since it is a continuous approval vote, the modifications will be implemented when more tokens are locked in this proposal than the previous one.

It is still unclear whether the fall in the price of ETH was influenced by this issue, as it declined from levels near $400 to about $364 before it incurred a little correction to the upside.  At press time, the price was at $380 level. 

The post Ethereum Declined By 5% as Maker DAO Discovered a Bug appeared first on Crypto Press.

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