DeFi Protocol Announces Losses as Attackers Exploit LUNA Price Difference

Terra’s seemingly endless free fall (Luna) due to price differences affecting two decentralized finance (DeFi) protocols as LUNA’s Chainlink price feed was suspended under extreme market conditions.

Avalanche-based liquidity protocol Blizz Finance reports that with the price of LUNA stuck at $0.10, attackers were able to deposit millions of LUNA to “borrow all collateral.” As a result, Blizzard Finance mentioned that its protocol was exhausted before its team was suspended. The team apologized to those affected.

In an official statement, the Venus Protocol explain When Chainlink suspended the LUNA price feed, the LUNA price on its platform remained at $0.107, compared to the market price of $0.01.According to reports, the platform lost $11.2 million due to price suspension. However, the platform noted that it will use its venture fund to make up for this shortfall.

While it appears that the cause of the fiasco appears to be a pause in Chainlink price feedback, some believe the loss was due to negligence by the protocol. Twitter user TheSoftwareJedi point out Chainlink’s feeds have the tools necessary to avoid problems, and it’s the protocol’s fault not to use them.

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Simultaneously, Terra blockchain is stopped Because its token is down more than 99%. According to Terraform Labs, the blockchain network has been discontinued to prevent governance attacks. However, its team coordinated a restart of the network almost immediately.

As LUNA continues to fall, Cryptocurrency exchange Binance delisted Its LUNA/tether (USDT) pair. Taking precautionary measures, the exchange announced on Thursday that it will delist the pair if the LUNA price falls below 0.005 USDT. LUNA has dipped below that price point and is currently trading at $0.000029, according to coin information site CoinGecko.