The Venus protocol has lost 11 million USD due to the collapse in LUNA token prices. Today the DeFi platform Venus Protocol stated a major loss due to a discrepancy in Chainlink-based LUNA price feed Oracle. The discrepancies in LUNA token price by the Chainlink platform have been exploited by attackers due to which millions of dollars were lost by the protocol.
Venus, the BNB-based decentralized algorithmic protocol gets its price feeds from Chainlink Oracles. The protocol receives its price feed from Chainlink oracles, where some of the major issues began to rise. Due to a sudden crash in the market and the suspension of Terra Blockchain, Chainlink discontinued the price feed oracle with the LUNA token.
Know More about Oracles, Read: Everything you need to know about Blockchain Oracle
The last reported price of LUNA on Venus was near $0.107, while the market price at the time of closure was $0.01. Venus took the cautionary step to mitigate the emerging risks and ceased the protocol using PauseGuardian via multisig. Venus also stated that to compensate for the shortcomings due to the preceding incident it has a ‘Risk Fund’ that will be used at the next stage.
Furthermore, a proposal to restart the entire system has been submitted and the operations are expected to begin in 48 hours. Also, the liquidity inside the protocol is safe and no transactions, withdrawals, or liquidation will take place during this 48 hours of time span.
Chainlink is the most widely adopted decentralized oracle network and its official team posted about the circuit breaker where LUNA/USD price feed was automatically triggered. According to the post, the circuit breaker is a defense mechanism that operates when a sudden price crash is acknowledged by the network. As per the risk mitigation program, the applications were paused because of the impacted price feeds.
Terra Blockchain Suspension
With the downfall of TerraUSD and LUNA, many crypto trading platforms like Binance have delisted their LUNA/Tether (USDT) pair as a precautionary measure. LUNA has already fallen far below the expected price and is now trading at $0.000027 at the time of writing, according to CoinMarketCap reports.
Due to turmoil in the market, Terraform Labs was forced to shut down its operations where the native token price dropped to more than 99%. However, the team has consolidated the issues and will restart the network anytime sooner.