Terra (LUNA) is delisted from exchanges, while Avalanche-based Blizz Finance is losing money and Chainlink (LINK) is to blame. Here’s why…
LUNA makes headlines again as a losing coin
The problem is this time with Chainlink, a Blockchain that allows hybrid smart contracts to power decentralized applications it happened. Chainlink suspended price updates for LUNA when the price dropped below the minimum allowed for LUNA/USD on Chainlink.
How did hackers steal money?
As price updates for Terra have been paused, network entities are in the dark about what’s going on with LUNA pricing. As a result, the attackers were able to deposit millions of Terra at the old high price of $0.10 set by Chainlink Oracle, which was not updated at the time. They then began to borrow all of their collateral.
Is Chainlink to blame for LUNA imbalance?
Chainlink accused of allowing some malicious actors to deposit low-value LUNA and still borrow their full collateral; Considering the downward fluctuation in LUNA’s price at the time, its value should have been significantly lower. Blizz Finance was one of countless businesses that lost money when attackers borrowed more than they invested. Blizz Finance is an Avalanche-based liquidity mechanism.
Chainlink pausing the LUNA oracle allowed several attackers to deposit millions of LUNA which is still worth $0.10 according to the Chainlink oracle to borrow all the collateral.
The protocol has been drained before we could pause due to our timelock.
— Blizz Finance (@BlizzFinance) May 13, 2022
Blizz Finance heard about Chainlink’s handling of LUNA’s decline He expressed his discomfort on Twitter. Chainlink’s oracle capability was designed to provide continuous price updates to decentralized services, but failed to do so in this case. This carelessness is now blamed for the losses suffered by Blizz Finance and other companies.
Chainlink pausing the LUNA oracle allowed several attackers to deposit millions of LUNA which is still worth $0.10 according to the Chainlink oracle to borrow all the collateral.
The protocol has been drained before we could pause due to our timelock.
— Blizz Finance (@BlizzFinance) May 13, 2022
According to Blizz Finance, an investigation into the incident to execute
Terra has been a source of frustration for many investors since its price began to drop sharply. It is currently trading at $0.00008316 and has dropped to 215th place out of the top 10 by market cap. Just a few weeks ago, it was one of the top 20 cryptos on the market, priced at over $115.
A post-mortem will follow.
— Blizz Finance (@BlizzFinance) May 13, 2022
Included on Binance after LUNAs printed to support UST price almost all exchanges decided to delist Terra and UST. Shortly after, Binance announced that Terra and UST will open for spot trading. Kriptokoin.com have handled the announcement in this article.
