- A $560M Binance Bridge exploit perpetrator faces a $30M liquidation on Venus due to the crypto market crash.
- The BNB Core team intervened with a manual liquidation to ensure stability and avoid further BNB price destabilization.
BNB Core Team Steps In Amid Market Instability
During the significant crypto market downturn on August 17, a substantial $30M BNB position on Venus, connected to the orchestrator of a $560M Binance Bridge breach, was liquidated. With BNB’s price plunging below the $220 mark, the BNB Core team took decisive action. Relying on a governance proposal Venus passed in November 2022, the team opted for a manual liquidation. Their primary objective? To attenuate the effects of the margin call in the on-chain space, where a potential liquidity deficiency might have further threatened BNB’s already shaky price, casting a shadow of contagion risk over BNB Chain’s wider DeFi framework.
Post the corrective measures, BNB was trading at a depreciated value of $215.8, witnessing a substantial 38% dip since the middle of April, data from CoinGecko indicates. Meanwhile, in a contrasting stride, Venus’ XVS token experienced a 6.5% surge within the past day.
Delving deeper into the backdrop of this financial drama, October 2022 saw the malefactor manipulating the BNB Chain bridge. The hacker craftily minted 2M BNB tokens and utilized 900,000 of them as collateral, securing a staggering $150M in stablecoins from Venus. Venus, post the market’s volatile gyrations, assured that the BNB Bridge exploiter’s account has been stabilized by the BNB Chain, employing whitelisted liquidation without further denting the BNB valuation.
Boasting a significant total value locked at $600M, Venus stands tall as the second-leading DeFi protocol within the BNB Chain ecosystem.
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The entire incident underscores the dichotomies inherent within different degrees of centralization provided by diverse smart contract networks. BNB Chain’s proactive intervention embodies a protective approach, averting the ripple effect of the liquidation.
Drawing a parallel, Michael Egorov, Curve Finance’s brainchild, recently hastened to clear his obligations on Ethereum-tied lending platforms. This urgency stemmed from concerns over potential price nosedives of CRV that might usher in colossal on-chain liquidations. The utilization of Vyper, a distinct smart contract coding dialect by Curve, became the epicenter of exploits on July 30.
These malicious activities culminated in a sudden CRV price drop, making loans anchored by CRV worth hundreds of millions susceptible to liquidations. Amid this chaos, inadequate on-chain CRV liquidity could have cornered dominant Ethereum lending protocols into bad debt, prompting Curve’s founder to dispose of significant CRV assets at depreciated rates via OTC transactions to liquidate his loans.
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