Nostra, a lending protocol on Starknet, has paused borrowing for 2 liquid staking tokens after figuring out a “critical issue” with its worth feeds, the decentralized finance (DeFi) protocol stated.
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 said in a put up on the X platform.
According to Nostra, “[s]uch an inflated price feed could have caused unnecessary liquidations of otherwise safe positions, resulting in users with healthy positions getting liquidated.”
In response, the DeFi protocol has disabled any additional borrowing towards xSTRK and sSTRK collateral deposits, Nostra stated.
Nostra has additionally really helpful that customers with current xSTRK and sSTRK deposits withdraw the collateral instantly.
“Since we don’t have a secondary (fallback) oracle to support these assets, as none are available, we are unable to fully prevent similar events from occurring in the future,” Nostra added.
“Our priority has always been and continues to be to keep existing user funds safe and with no fallback oracle, the risks outweigh the benefits,” it stated.
Nostra’s collateral token choices. Source: Nostra
Related: Starknet to settle 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, according to Messari.
It has a complete worth locked (TVL) of roughly $575 million, in keeping with data from L2Beat.
Lending protocol Nostra is among the many bigger DeFi tasks working on the chain. It has a TVL of roughly $55 million, in keeping 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 charge revenues, according to its documentation.
xSTRK and sSTRK are liquid staking tokens issued by unbiased DeFi protocols Endur and Nimbura, respectively.
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