The lending protocol Nostra on Starknet has temporarily halted borrowing due to a critical issue in its price feeds.
Price Feed Error
On March 24, Nostra identified an error in its price feed that inflated the reported prices of xSTRK and sSTRK derivatives approximately three-fold compared to their actual value. This inflation could have resulted in unnecessary liquidations of otherwise safe user positions.
Nostra's Response
In response to the issue, Nostra has disabled borrowing against xSTRK and sSTRK collateral deposits and recommended users urgently withdraw the existing collateral. The absence of a fallback oracle for these assets leaves the risk of similar future events unaddressed.
Starknet and Nostra Context
Starknet is an Ethereum layer-2 scaling solution using ZK-proofs. Lending protocol Nostra is one of the larger DeFi projects on the chain. Users can post collateral in one token to borrow in another, with popular collateral tokens including Ether, STRK, and stablecoins USDC and USDT.
The price distortion situation in Nostra highlights the importance of having reliable price feeds and fallback mechanisms to protect user funds in DeFi systems.
