Oracle Error Leaves DeFi Lender Moonwell With $1.8 Million in Bad Debt – Decrypt

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Oracle Error Leaves DeFi Lender Moonwell With .8 Million in Bad Debt – Decrypt

By Jason Nelson
Publication Date: 2026-02-18 05:46:00

Short

  • A misconfigured oracle cost cbETH about $1 instead of about $2,200.
  • Liquidations seized 1,096,317 cbETH and wiped out the borrower’s collateral.
  • The protocol was left with $1.78 million in bad debt pending a governance resolution.

A Sunday morning price glitch caused a multi-million dollar headache for DeFi lending platform Moonwell after a “misconfigured oracle” briefly valued Coinbase Wrapped ETH (cbETH) for just $1.

The pricing error made resulted in a 99.9% discount to the asset’s actual market value of approximately $2,200. The error triggered a wave of liquidations that ultimately left the platform with about $1.78 million in bad debt.

“Once identified, our risk manager @anthiasxyz acted quickly and lowered the cbETH lending cap to 0.01 to mitigate further risks to the protocol,” Moonwell wrote on X on Monday. “In addition, the supply cap was lowered to 0.01 to prevent new users from unknowingly supplying the affected market.”

In a Moonwell forum post on Monday,…

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