DeFi lender Nostra pauses borrowing after price feed error

Nostra, a lending protocol on Starknet, has paused borrowing for 2 liquid staking tokens after figuring out a “vital situation” with its worth feeds, the decentralized finance (DeFi) protocol mentioned. 

On March 24, errors in Nostra’s worth feed inflated the reported costs of xSTRK and sSTRK — two liquid staking derivatives of Starknet’s native STRK token — to roughly 3 times the tokens’ precise worth, Nostra mentioned in a put up on the X platform.

Based on Nostra, “[s]uch an inflated worth feed might have brought about pointless liquidations of in any other case protected positions, leading to customers with wholesome positions getting liquidated.” 

In response, the DeFi protocol has disabled any additional borrowing towards xSTRK and sSTRK collateral deposits, Nostra mentioned. 

Nostra has additionally beneficial that customers with current xSTRK and sSTRK deposits withdraw the collateral instantly. 

“Since we don’t have a secondary (fallback) oracle to help these belongings, as none can be found, we’re unable to totally forestall comparable occasions from occurring sooner or later,” Nostra added.

“Our precedence has at all times been and continues to be to maintain current person funds protected and with no fallback oracle, the dangers outweigh the advantages,” it mentioned. 

Associated: Starknet to decide on Bitcoin and Ethereum to unify the chains

Starknet DeFi protocol

Starknet is a layer-2 scaling chain of Ethereum secured utilizing zero-knowledge (ZK) proofs. It launched its mainnet in late 2021, in accordance with Messari.

It has a complete worth locked (TVL) of roughly $575 million, in accordance with knowledge from L2Beat. 

Lending protocol Nostra is among the many bigger DeFi initiatives working on the chain. It has a TVL of roughly $55 million, in accordance with its web site. 

On Nostra, customers put up collateral in a single token to borrow in one other token. The DeFi protocol’s hottest collateral tokens are Ether, STRK, and stablecoins USDC (USDC) and Tether (USDT). 

Starknet designed STRK to be staked in trade for a portion of the community’s price revenues, in accordance with its documentation.

xSTRK and sSTRK are liquid staking tokens issued by unbiased DeFi protocols Endur and Nimbura, respectively. 

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