LUNA quote stoppage via Chainlink hit the DeFi market

Decentralized Finance (DeFi) protocols lost tens of millions of dollars amid the collapse of terra (LUNA) quotes.

DeFi representatives of the Venus Protocol initially said on their blog that the Chainlink oracle had frozen the display of market quotes due to LUNA volatility.

As a result, the protocol started getting LUNA values above the market rate, and at the wrong rate, the project issued $13.5 million in credits in exchange for $230 million in LUNA.

Source: web.archive.org

However, the developers later removed the statement from the announcement. The original version of the statement is still available to view through the Wayback Machine.

DeFi liquidity provider Blizz Finance also suffered from the collapse of LUNA. The project said that because of the suspension of the oracle, attackers were able to deposit millions in LUNA at the wrong rate. As a result of the shenanigans, the protocol ran out of funds, the developers said on Twitter.

A Chainlink spokesman told Discord that there was no way the project team could have influenced the oracle to stop centrally. According to Chainlink’s claim, the oracle triggered a defense mechanism against market volatility. Whether the affected protocols will pay compensation remains unclear.

Read also: OKX crypto exchange gets rid of LUNA following Binance

Earlier, the editorial board reported that due to the unstable situation around LUNA, the developers of the Terra blockchain suspended the work of the network. Terra Labs stated that further work would jeopardize the entire ecosystem. At the time of writing, the developers are testing updates to get the network back up and running. However, it’s unclear when exactly Terra will be able to return to its normal state.

Read about how the Terra community was enraged by the LUNA price collapse and why it is against new initiatives in the BeInCrypto editorial.

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