Venus Protocol: Threat of a $150M liquidation

In the tormented wake of the cryptosphere, Venus Protocol finds itself in the limelight. This decentralized lending platform within the BNB Chain ecosystem is threatened by the potential liquidation of a massive BNB lending position, held by a hacker. The importance of this situation has the whole community in suspense.

A hack with considerable scope

A shadow hangs over Venus Protocol, since the audacious hack of the BNB channel last October. The malicious act resulted in the estimated loss of $120-150 million in cryptocurrencies.

The hacker then mined the stolen BNB, using the Venus protocol to borrow stablecoins worth $150 million, with a large position of 900,000 BNB, or about $210 million. Since then, this position has remained unchanged.

Since the pullback in cryptocurrency prices in recent months, the health of this large lending position is hovering dangerously around 1.03, flirting with the point of liquidation.

A fall in the price of BNB to $220 could trigger the liquidation process, adding even more tension to this already precarious situation.

Preventive measures put in place

However, all hope is not lost. The BNB Chain team stands ready to take over the position if the liquidation threshold is reached.

In November, a proposal was adopted, granting the central team the necessary authorizations to liquidate the position, aiming to limit the impact on the rest of the market.

Today, the developers have taken matters into their own hands. They transferred $30 million USDT from Binance to the authorized wallet to liquidate the position. According to Venus, these funds will allow to avoid a miss on Venus and to provide additional support.

As the echo of last year’s exploit still resonates, Venus Protocol and the team at BNB Chain are working to address this impending crisis. This turning point could well serve as a crucial lesson in managing the risks of decentralized finance. Only time will reveal the final repercussions of this intriguing case. Nevertheless, so far, scams remain predominant compared to flaws in the DEFI.