Home News DeFi protocols declare losses as attackers exploit LUNA price feed discrepancy

DeFi protocols declare losses as attackers exploit LUNA price feed discrepancy

667
0
DeFi

Due to a price disparity, the Chainlink price feed for Terra (LUNA) was terminated amid extraordinary market conditions, affecting two decentralised finance (DeFi) protocols.

Liquidity protocol using avalanche Attackers were able to deposit millions of LUNA to “borrow all the collateral,” according to Blizz Finance, because the price of LUNA was fixed at $0.10. As a result, Blizz Finance stated that its protocol had been depleted before their team could pause. The players expressed their regret to those who were harmed.

The LUNA price on Venus Protocol’s platform stayed at $0.107 when Chainlink suspended the LUNA price stream, but the market price was at $0.01. Because of the pricing freeze, the platform is said to have lost $11.2 million. The platform, on the other hand, stated that it will use its risk fund to make up for the gap.

Losses were caused by DeFi protocol failure

While the suspension of Chainlink price feeds appears to be the root of the problem, some believe the losses were caused by protocol failure. Chainlink’s feeds, according to Twitter user TheSoftwareJedi, have the means to avoid the problem, and it’s the protocols’ fault for not utilising them.

Meanwhile, the Terra blockchain was brought to a halt after its token fell by over 99%. The blockchain network was shut down to avoid governance attacks, according to Terraform Labs. Its crew, on the other hand, worked quickly to restore the network.

Binance delisted the LUNA/Tether (USDT) pair when the price of the cryptocurrency fell. The exchange announced on Thursday that if the LUNA price falls below 0.005 USDT, it will delist the pair as a precaution. According to the currency research website CoinGecko, LUNA has already gone below that price point and is currently trading at $0.000029.

Binance temporarily suspends LUNA, UST withdrawals citing network congestion

Previous articlePancakeSwap governance proposal set to cap CAKE supply at 750M
Next articleEmirates to accept BTC payments and launch NFT collectibles