Both Venus Protocol and Blizz Finance announced that their protocols had been attacked as a result of the discrepancy in LUNA market price and price feed owing to Chainlink’s pause of the oracle.
Two DeFi (decentralized finance) protocols were adversely affected by the seemingly unending freefall of Terra (LUNA), owing to a pricing mistake, as Chainlink’s price feed for LUNA is terminated in response to fierce market circumstances.
Blizz Finance, a liquidity protocol based on the Avalanche framework, stated that as the price of LUNA remained at $0.10, attackers were able to inject millions of LUNA into ‘borrow all the collateral.’ Because of this, according to Blizz Finance, the protocol was emptied before its staff had a chance to halt it. The company accepted responsibility for the problems.
When Chainlink stopped providing the LUNA price feed, the market value was $0.01, but the LUNA price on their platform remained at $0.107.
The price suspension has cost the platform more than $11.2 million, according to reports. However, the company announced that it would use its risk pool to make up for the loss.
While the Chainlink price feeds suspension appears to be the reason behind the turmoil, some people believe that the protocols’ failure was to blame.
Chainlink’s feeds have the tools required to avoid the problem, according to TheSoftwareJedi, and it’s the protocols’ fault for not utilizing them.
The Terra blockchain was shut down after its token fell by more than 99%. The blockchain network was shut down to protect against governance assaults, according to Terraform Labs. Its staff, on the other hand, collaborated to restart the network almost immediately.
Binance delisted its LUNA/Tether (USDT) pair after LUNACOIN continued to fall. The exchange announced on Thursday that it will delist the pair if the LUNA price falls below 0.005 USDT, as a precautionary measure. LUNA has already fallen below that price point and is now trading at $0.000029, according to CoinGecko, a coin information website.