Liquidation of $30M on the Venus Protocol for BNB Chain Exploitation

This is the second large-scale liquidation in a little under a week, and it may prevent a dramatic drop in pricing.

Today, when the price of bnb (BNB) plunged to $209, a notorious wallet that had borrowed more than $150 million worth of stablecoins from the lending and borrowing platform Venus Protocol was liquidated for more than $30 million.

According to a November 2022 governance decision, the BNB Chain development team probably physically liquidated around 6.89 million venus bnb (vBNB) tokens worth $30 million.

When a trader’s original margin is exhausted, the exchange may liquidate the trader’s leveraged position (i.e., close the deal for him or her). When a trader doesn’t have enough money or doesn’t fulfill the margin requirements for a leveraged position, the deal is closed.

The renowned BNB Chain exploiter has a wallet that is one of these borrowers. A BNB Chain-based bridge was exploited by a hacker last year, resulting in the theft of more than $100 million worth of bnb tokens.

The hacker then used bnb tokens to borrow $150 million in stablecoins using the Venus lending system. Airbnb prices have been dropping significantly over the last year, and now the large debt is almost liquidated. If the token is sold on the open market to repay the loan, the price might drop precipitously.

Even the multibillion-dollar decentralized financial ecosystem based on BNB Chain might be shaken by such a collapse. Because of this potential threat, Venus and BNB Chain have joined forces to stop it.

If it reaches the liquidation line, we will work with Binance and other members of the BNB Chain Ecosystem to assume the position and refund the debt as a group. According to the plan, “the stability and fund coverage of Venus will be put at the high priority.”

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