DeFi lender Nostra pauses borrowing after price feed error

Nostra, a lending protocol connected Starknet, has paused borrowing for 2 liquid staking tokens aft identifying a “critical issue” with its terms feeds, the decentralized concern (DeFi) protocol said. 

On March 24, errors successful Nostra’s terms provender inflated the reported prices of xSTRK and sSTRK — 2 liquid staking derivatives of Starknet’s autochthonal STRK token — to astir 3 times the tokens’ existent value, Nostra said successful a station connected the X platform.

According to Nostra, “[s]uch an inflated terms provender could person caused unnecessary liquidations of different harmless positions, resulting successful users with steadfast positions getting liquidated.” 

In response, the DeFi protocol has disabled immoderate further borrowing against xSTRK and sSTRK collateral deposits, Nostra said. 

Nostra has besides recommended that users with existing xSTRK and sSTRK deposits retreat the collateral immediately. 

“Since we don’t person a secondary (fallback) oracle to enactment these assets, arsenic nary are available, we are incapable to afloat forestall akin events from occurring successful the future,” Nostra added.

“Our precedence has ever been and continues to beryllium to support existing idiosyncratic funds harmless and with nary fallback oracle, the risks outweigh the benefits,” it said. 

Nostra’s collateral token options. Source: Nostra

Related: Starknet to settee connected Bitcoin and Ethereum to unify the chains

Starknet DeFi protocol

Starknet is simply a layer-2 scaling concatenation of Ethereum secured utilizing zero-knowledge (ZK) proofs. It launched its mainnet successful precocious 2021, according to Messari.

It has a full worth locked (TVL) of astir $575 million, according to data from L2Beat. 

Lending protocol Nostra is among the larger DeFi projects operating connected the chain. It has a TVL of astir $55 million, according to its website. 

On Nostra, users station collateral successful 1 token to get successful different token. The DeFi protocol’s astir fashionable collateral tokens are Ether, STRK, and stablecoins USDC (USDC) and Tether (USDT). 

Starknet designed STRK to beryllium staked successful speech for a information of the network’s interest revenues, according to its documentation.

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

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