Nostra, a lending protocol on Starknet, has made the decision to halt borrowing for two liquid staking tokens temporarily. This action comes in response to a critical problem with the platform’s price feeds. Specifically, on March 24, Nostra detected inaccuracies in its price feed mechanism. These errors caused the reported prices of xSTRK and sSTRK, which are liquid staking derivatives of Starknet’s native STRK token, to be inflated to nearly three times their actual value. This issue could potentially trigger unnecessary liquidations of secure positions, impacting users with otherwise stable positions.
Impact of Price Feed Issue
The identified price feed problem has forced Nostra to pause borrowing activities for the affected liquid staking tokens. The inflated prices reported by the system could have serious implications for users, potentially leading to unwarranted liquidations that might harm individuals with secure holdings.
📉 What Caused the Price Feed Issue?
The root cause of the price feed discrepancy has not been fully disclosed by Nostra. However, such incidents can result from technical glitches in the price oracle system or external manipulation. Regardless of the cause, these inaccuracies highlight the vulnerability of DeFi platforms to external influences and technical failures.
⚡ What’s Next for Nostra and Its Users?
Nostra’s decision to suspend borrowing temporarily demonstrates its commitment to safeguarding user funds and maintaining the integrity of its platform. Moving forward, users must exercise caution and stay informed about any updates regarding the resolution of the price feed issue. It is crucial for users to monitor the situation closely to protect their investments and prevent any potential losses.
🤔 How Can Users Protect Their Investments?
In light of the recent price feed problem, users are advised to stay vigilant and consider diversifying their holdings across different platforms to mitigate risks associated with vulnerabilities in a single protocol. Additionally, users should stay informed about the latest developments from Nostra and follow any guidelines provided by the platform to ensure the security of their assets.
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