Nostra, a lending protocol operating on the Starknet network, has halted borrowing for two liquid staking tokens after discovering a “critical issue” with its price feeds, as announced by the decentralized finance (DeFi) platform.
On March 24, inaccuracies in Nostra’s price feed caused the reported values of xSTRK and sSTRK—two liquid staking derivatives of Starknet’s native STRK token—to surge to nearly three times their actual worth, as detailed in a post on the X platform.
Nostra expressed concern that “[s]uch an inflated price feed could have led to unnecessary liquidations of otherwise safe positions, with users experiencing liquidations despite having healthy standings.”
In light of this, the DeFi platform has disabled further borrowing using xSTRK and sSTRK collateral. Additionally, users with existing deposits of these tokens have been urged to withdraw their collateral promptly.
“Since we lack a secondary (fallback) oracle to support these assets, and none are currently available, we are unable to entirely prevent similar incidents from happening in the future,” Nostra noted.
“Our foremost priority has always been, and remains, the safety of user funds, and without a fallback oracle, the risks outweigh the potential benefits,” the firm stated.
Starknet is a layer-2 scaling solution for Ethereum, utilizing zero-knowledge (ZK) proofs for security. The mainnet launched in late 2021, and as of now, it holds approximately $575 million in total value locked (TVL), according to L2Beat data.
Nostra ranks among the more prominent DeFi projects on the platform, boasting a TVL of around $55 million as per its official site. Users on Nostra can post collateral in one token to borrow another, with the most commonly used collateral options being Ether, STRK, and stablecoins like USDC and Tether (USDT).
STRK is designed for staking in exchange for a share of the network’s fee revenues, as detailed in the official documentation. xSTRK and sSTRK are liquid staking tokens provided by separate DeFi platforms, Endur and Nimbura, respectively.