Faulty Pragma Oracle Feed Triggers $3M in Wrongful Liquidations on Starknet's Vesu

A malfunctioning price feed from oracle provider Pragma triggered a wave of irregular liquidations on Vesu, a lending protocol built on Starknet, wiping out $3 million in collateral across 47 positions within a two-minute window on September 4.

According to an announcement Vesu published on September 5, the faulty upstream Pragma feed caused the unwarranted liquidations between 04:08 and 04:10 UTC. The protocol said the feed self-corrected within roughly two minutes, but not before dozens of positions across several Vesu pools were affected.

Vesu was explicit that the incident did not stem from a flaw in its own code. The protocol said its smart contracts had no vulnerability and functioned as designed, placing the fault squarely on the upstream data feed rather than on its lending logic.

Recovery effort under way

Pragma has since released a fix targeting the root cause of the price error. As a precaution, pool curators suspended the affected liquidity pools while they review that fix before any resumption of activity.

Vesu said it is now coordinating recovery efforts with Pragma, StarkWare, the Starknet Foundation and pool curators. The protocol has not confirmed repayment amounts or a timeline for when affected users might be made whole.

In the meantime, Vesu has advised depositors in its Earn product to keep their positions open in order to preserve eligibility for any future repayment. Borrowers who believe they were affected have been told to open a support ticket through Vesu's Discord server. The protocol has committed to publishing a full technical report once its investigation concludes.

Not the first oracle failure to hit DeFi

The episode echoes a similar incident on Aave in March 2026, when a stale parameter triggered unwanted liquidations of wstETH positions, with losses estimated at $26 million to $27 million. Vesu has not announced any structural changes to its oracle setup comparable to those Aave pursued after its own incident.

Vesu sits alongside exchanges avnu and Ekubo and staking provider Endur as part of Starknet's broader DeFi stack, which as of June 2026 has positioned the network as one of the more active layer-2 ecosystems for onchain lending and trading. The oracle failure underscores a recurring risk for that stack: liquidation engines that behave exactly as designed can still produce unwarranted outcomes when the price data feeding them briefly goes wrong.