Vesu Oracle Incident Wipes Out $3M in Starknet Liquidations

A two-minute glitch in a price feed was enough to trigger millions of dollars in unwanted liquidations on Starknet. Vesu, a lending protocol built on the network, disclosed on Sept. 5 that the Vesu oracle incident stemmed from faulty data supplied by Pragma, an upstream price provider, and that the error wiped out 47 borrowing positions holding $3 million in collateral on Sept. 4. The episode is now forcing a familiar question in decentralized finance: how much should a lending market trust a single external data source?

Key takeaways

• A faulty Pragma price feed caused Vesu to liquidate 47 positions worth $3 million in collateral on Sept. 4, between 04:08 and 04:10 UTC.
• The bad data lasted roughly two minutes before Pragma’s feed corrected itself and resumed normal operation.
• Vesu says its smart contracts had no vulnerability — the liquidation engine simply executed correctly on incorrect price inputs.
• Pragma has deployed a fix, and pool curators suspended affected markets as a precaution while reviewing it.
• Vesu, Pragma, StarkWare, the Starknet Foundation and pool curators are coordinating a recovery effort, but no reimbursement amount or timeline has been confirmed.

Faulty Pragma Price Feed Causes $3M Liquidations on Vesu

The trouble began in the early hours of Sept. 4, when an upstream feed operated by Pragma began reporting incorrect prices to several Vesu liquidity pools. In a Sept. 5 disclosure, Vesu wrote: “A faulty upstream Pragma price feed caused 47 positions and $3M of collateral to be irregularly liquidated across several Vesu pools between 04:08 and 04:10 UTC.” The protocol added that “the feed corrected itself within two minutes, and nothing has been…” — the statement was cut short in the original post, but the timeline it describes is clear.

… Continue reading the full article at the original source below.