Moonwell oracle error creates 1.8 million in bad debt after cbETH misprice

Editor’s note: This story was updated with confirmation of AI-generated code involvement and details on Moonwell’s prior oracle incidents.

UPDATE (18 Feb 2026, 17:00 CET): Blockchain security auditor Pashov confirmed that portions of the vulnerable oracle code were co-authored by Anthropic’s AI model Claude Opus 4.6, according to GitHub commit records in Moonwell’s repository. The commits show AI-generated logic was used in the oracle configuration that failed to multiply the cbETH/ETH ratio by the ETH/USD price feed.

SlowMist founder Cos described the error as a “very low-level bug” in the oracle’s price calculation formula. Security researchers noted the misconfiguration should have been caught during standard audit procedures, but no auditor flagged the oracle logic before MIP-X43 deployment.

The incident marks one of the first major DeFi exploits directly linked to AI-written Solidity code, sparking debate over AI-assisted smart contract development. Moonwell has experienced three oracle-related incidents in the past six months, resulting in over $7 million in total bad debt across the failures.

In a forum post on 16 February 2026, risk-management firm Anthias Labs reported that the issue began at 6:01 PM UTC on 15 February 2026, when a Moonwell DAO governance proposal, MIP-X43, was executed to enable Chainlink OEV wrapper contracts across markets on Base and Optimism. Anthias said one oracle was misconfigured and failed to calculate cbETH’s U.S. dollar price correctly.

Moonwell explained that instead of multiplying the cbETH/ETH feed by the ETH/USD price, the system used only the cbETH/ETH exchange rate, which resulted in a reported cbETH price around $1.12. With collateral suddenly priced near zero, trading bots targeted cbETH-backed positions and liquidators were able to repay about $1 of debt to seize 1,096.317 cbETH, Moonwell said, wiping out collateral while leaving borrowers with residual debt.

Anthias added that some users also exploited the distorted pricing by supplying minimal collateral, then borrowing cbETH at the artificially low oracle price to create additional cbETH-denominated bad debt. Moonwell said it reduced the cbETH borrow cap to 0.01 and cut the supply cap to 0.01 to limit further exposure, and it plans a governance vote to address oracle configuration after the required timelock.

Moonwell put total bad debt at $1,779,044 across affected markets. Users on X circulated images suggesting MIP-X43 was co-authored by Claude Opus 4.6, framing the incident as a vibe-coding error. A Moonwell spokesperson declined to comment to Decrypt. The incident follows other oracle-related losses, including a Ribbon Finance exploit in December that it linked to a decimal mismatch during an oracle upgrade, and a January exploit at Makina Finance tied to flash-loan-driven oracle manipulation.