DeFi Platform Nostra Halts Borrowing Following Price Feed Issue

Nostra, a decentralized finance (DeFi) lending protocol operating on Starknet, has temporarily halted borrowing for two liquid staking tokens due to a critical issue with its price feeds.

Price Feed Error Inflates Token Values

On March 24, Nostra identified errors in its price feeds that significantly inflated the reported prices of two liquid staking derivatives—xSTRK and sSTRK. These tokens, derivatives of Starknet’s native STRK token, were incorrectly valued at approximately three times their actual market price.

Nostra explained that the inflated price feeds posed a risk of unnecessary liquidations, potentially causing users with otherwise healthy positions to lose their collateral.

Immediate Response and Recommendations

In response to the issue, Nostra has:

• Paused borrowing against xSTRK and sSTRK collateral deposits.
• Recommended users withdraw their existing xSTRK and sSTRK collateral immediately.

The protocol noted the absence of a secondary (fallback) oracle for these assets, emphasizing that without such a backup, similar incidents could occur again in the future. Nostra stated, “Our priority has always been and continues to be to keep existing user funds safe, and with no fallback oracle, the risks outweigh the benefits.”

About Starknet and Nostra

Starknet is an Ethereum layer-2 scaling solution secured by zero-knowledge (ZK) proofs, launched in late 2021. It currently holds approximately $575 million in total value locked (TVL), according to data from L2Beat.

Nostra is among the prominent DeFi protocols on Starknet, with a TVL of around $55 million. Users typically deposit collateral in tokens such as Ether, STRK, USDC, and USDT to borrow other assets.

xSTRK and sSTRK are liquid staking tokens issued by independent DeFi protocols Endur and Nimbura, respectively, allowing users to stake STRK tokens and earn a share of network fee revenues.

Quick Summary

• Nostra halted borrowing for xSTRK and sSTRK due to inflated price feeds.
• Users advised to withdraw collateral immediately.
• No fallback oracle available, increasing future risk.
• Nostra prioritizes user fund safety over continued borrowing.

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