- Nostra, a Starknet lending protocol, has paused borrowing against xSTRK and sSTRK tokens after price feed errors inflated their values threefold.
- The protocol has advised users with existing collateral in these tokens to withdraw immediately as no fallback oracle exists to prevent similar issues.
- Nostra, with approximately $55 million TVL, is one of the larger DeFi projects on Starknet, which itself holds around $575 million in total value locked.
Nostra Finance has disabled borrowing capabilities for two Starknet liquid staking tokens after detecting critical price feed errors that artificially inflated their values. The decentralized finance protocol identified an issue that caused xSTRK and sSTRK tokens to be valued at approximately three times their actual market rate on March 24.
The price feed malfunction posed significant risks to platform users, as Nostra explained in their announcement on X: “Such an inflated price feed could have caused unnecessary liquidations of otherwise safe positions, resulting in users with healthy positions getting liquidated.”
In response to the vulnerability, the protocol has taken immediate protective measures by suspending all borrowing against xSTRK and sSTRK collateral. Additionally, Nostra has strongly recommended that users currently holding these tokens as collateral withdraw them promptly to avoid potential complications.
The DeFi platform cited the lack of alternative verification mechanisms as a key factor in their decision, stating: “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.” The protocol emphasized that user fund security remains their priority, adding that “the risks outweigh the benefits” without proper fallback systems.
Nostra operates as a lending protocol on Starknet, a layer-2 scaling solution for Ethereum that utilizes zero-knowledge proofs for security. Starknet launched its mainnet in late 2021, Messari.io/project/starknet/profile”>according to Messari, and currently holds approximately $575 million in total value locked (TVL), as data from L2Beat indicates.
With around $55 million in TVL according to its website, Nostra stands as one of the more substantial DeFi projects within the Starknet ecosystem. The platform enables users to deposit collateral in one token to borrow another, with its most utilized collateral options being Ether, STRK, and stablecoins like USDC and Tether.
STRK, Starknet’s native token, was designed to be staked in exchange for a portion of network fee revenues, according to official documentation. The affected tokens—xSTRK and sSTRK—are liquid staking derivatives issued by independent DeFi protocols Endur and Nimbura, respectively, allowing users to maintain liquidity while still earning staking rewards.
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