DeFi protocols declare losses as attackers exploit LUNA price feed discrepancy

Venus Protocol and Blizz Finance announced that their protocols were exploited due to the difference in LUNA market price and price feed as Chainlink paused the LUNA oracle.

The seemingly endless freefall of Terra (LUNA) affected two decentralized finance (DeFi) protocols due to a price discrepancy, as the Chainlink price feed for LUNA gets suspended over extreme market conditions. 

Avalanche-based liquidity protocol Blizz Finance reported that as the price of LUNA was stuck at $0.10, attackers were able to deposit millions of LUNA to “borrow all the collateral.” As a result, Blizz Finance mentioned that its protocol was drained before its team could pause. The team apologized to those who were affected.

In an official statement, Venus Protocol explained that when Chainlink paused the LUNA price feed, the LUNA price on their platform remained at $0.107 while the market price was at $0.01. The platform reportedly lost $11.2 million because of the price suspension. However, the platform noted that it will utilize its risk fund to bring remedy to this shortfall. 

While it seems like the cause of the fiasco is the suspension of the Chainlink price feeds, some believe that the losses were due to the protocols’ negligence. Twitter user TheSoftwareJedi pointed out that Chainlink’s feeds have the tools necessary to avoid the problem and that it’s the protocols’ fault for not using them.

Meanwhile, the Terra blockchain was halted as its token dropped by more than 99%. According to Terraform Labs, the blockchain network was discontinued to prevent governance attacks. However, its team coordinated to restart the network almost immediately.

As LUNA continued to fall, crypto exchange Binance delisted its LUNA/Tether (USDT) pair. Taking precautionary measures, the exchange announced Thursday that it will delist the pair if the LUNA price goes below 0.005 USDT. LUNA has already fallen below that price point and is now trading at $0.000029 at the time of writing, according to coin information site CoinGecko.

Emma Lamb

Emma Lamb

Share:

Share on telegram
Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp

Related Posts

bitcoin
Bitcoin (BTC) $ 51,512.80
ethereum
Ethereum (ETH) $ 3,111.19
tether
Tether (USDT) $ 0.999884
bnb
BNB (BNB) $ 386.50
solana
Solana (SOL) $ 103.79
staked-ether
Lido Staked Ether (STETH) $ 3,107.47
xrp
XRP (XRP) $ 0.541302
usd-coin
USDC (USDC) $ 0.999303
cardano
Cardano (ADA) $ 0.587489
avalanche-2
Avalanche (AVAX) $ 37.48
dogecoin
Dogecoin (DOGE) $ 0.085674
tron
TRON (TRX) $ 0.137432
chainlink
Chainlink (LINK) $ 18.72
polkadot
Polkadot (DOT) $ 7.83
matic-network
Polygon (MATIC) $ 0.996288
uniswap
Uniswap (UNI) $ 10.97
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 51,580.82
the-open-network
Toncoin (TON) $ 2.12
internet-computer
Internet Computer (ICP) $ 12.44
shiba-inu
Shiba Inu (SHIB) $ 0.000010
bitcoin-cash
Bitcoin Cash (BCH) $ 266.38
litecoin
Litecoin (LTC) $ 70.15
dai
Dai (DAI) $ 0.999836
immutable-x
Immutable (IMX) $ 3.25
filecoin
Filecoin (FIL) $ 8.18
cosmos
Cosmos Hub (ATOM) $ 10.37
leo-token
LEO Token (LEO) $ 4.25
ethereum-classic
Ethereum Classic (ETC) $ 27.24
kaspa
Kaspa (KAS) $ 0.169599
near
NEAR Protocol (NEAR) $ 3.68
blockstack
Stacks (STX) $ 2.56
optimism
Optimism (OP) $ 3.83
hedera-hashgraph
Hedera (HBAR) $ 0.108124
bittensor
Bittensor (TAO) $ 569.17
aptos
Aptos (APT) $ 9.63
vechain
VeChain (VET) $ 0.046396
first-digital-usd
First Digital USD (FDUSD) $ 0.999255
stellar
Stellar (XLM) $ 0.115884
injective-protocol
Injective (INJ) $ 35.62
okb
OKB (OKB) $ 50.33
lido-dao
Lido DAO (LDO) $ 3.37
mantle
Mantle (MNT) $ 0.908338
celestia
Celestia (TIA) $ 16.92
the-graph
The Graph (GRT) $ 0.297383
render-token
Render (RNDR) $ 7.26
crypto-com-chain
Cronos (CRO) $ 0.094394
arbitrum
Arbitrum (ARB) $ 1.90
monero
Monero (XMR) $ 129.54
sei-network
Sei (SEI) $ 0.816762
sui
Sui (SUI) $ 1.64