Venus Protocol’s $30 Million Collateral Liquidation
Venus Protocol, a prominent lending platform, has recently undertaken a significant liquidation, involving over $30 million worth of collateral from a notorious wallet. This wallet had borrowed substantial amounts of stablecoins from the platform, and the liquidation was prompted by the decline of BNB, the native token of the BNB chain.
Forced Sale of 6.89 Million vBNB Tokens
The liquidation process resulted in the forced sale of approximately 6.89 million Venus BNB (vBNB) tokens. This action aligns with a governance vote by BNB developers that took place in November 2022. Such liquidations occur when a heavily leveraged position drops below a required margin threshold. This can be attributed to various factors, but it’s often due to declining asset prices.
Sequential Liquidations: $60 Million and $30 Million
This recent liquidation of $30 million follows closely on the heels of a larger $60 million liquidation that occurred over two transactions in the previous week. Together, these enforcement measures have successfully reclaimed a substantial portion of the funds that were borrowed by the wallet in question. This wallet had managed to accumulate more than $150 million in stablecoins from Venus Protocol by exploiting a vulnerability.
Insights from PeckShield
A report from blockchain security firm PeckShield highlighted the liquidation of a cryptocurrency wallet containing collateral worth over $63 million on the Venus Protocol lending platform. Initially, $10.4 million in collateral was liquidated, followed by an additional liquidation of $53.2 million worth of assets from the same wallet.
The said wallet was linked to a significant acquisition of Binance Coin (BNB) back in October 2021. The individual responsible for this incident had utilized the stolen BNB to secure a $30 million Tether loan from Venus Protocol. With the recent drop in BNB’s price to under $220, an automatic liquidation of the hacker’s collateral positions was triggered. As of now, BNB is trading at $211, reflecting a 3% decrease in value over the past 24 hours.
Impact on BNB Chain and Venus Protocol
The BNB chain, along with Venus Protocol, has been influenced by these substantial liquidations. The decline in BNB’s value has played a crucial role in triggering the liquidation events, leading to a broader discussion about the platform’s security measures and the overall stability of the BNB chain.
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