In short: The BNB Chain core team will be taking over a $150 million Binance Coin (BNB) loan position from decentralized lending platform, Venus Protocol. The loan belonged to a hacker who exploited a cross-chain infrastructure resulting in the loss of over $100 million in crypto assets. The position has been in place since the attack, and the whitelisted wallet has begun preparations to liquidate the loan position to prevent a shortfall and further market damage.
Our quick analysis:
The BNB Chain core team has come to the aid of Venus Protocol by taking over its $150 million Binance Coin (BNB) loan position as it approached the liquidation threshold. The loan was initially owned by a hacker who breached the cross-chain infrastructure on the BNB Chain in October 2022, leading to a loss of over $100 million in crypto assets.
To prevent a shortfall on Venus and provide additional support during the process, the BNB Chain team sent $30 million in Tether (USDT) to the whitelisted wallet exclusively permitted to execute the liquidation. The wallet was chosen via a governance proposal released a month after the BNB Chain hack.
During the attack, the hacker manipulated security proofs and minted two million BNB tokens, worth $560 million at the time. The hacker took advantage of the vulnerability related to the "iavl hash check" within the BNB cross-chain bridge. With the stolen BNB, the hacker borrowed $150 million worth of USDT and USD Coin (USDC), leveraging a 900,000 BNB position against Venus.
The Venus team stated that "the whitelisted wallet was initially funded with $30M in USDT with the assurance of preventing shortfall on Venus and providing additional support through this Venus governance approved mechanism."
The BNB Chain team executed a hard fork after the hack to secure the bridge between the BNB Beacon Chain and the BNB Smart Chain. Due to the deteriorating health rate of the loan and the potential of a further drop in BNB's price, the whitelisted wallet has begun preparations to liquidate the position. Without the wallet's intervention, liquidating the loan may cause cascading effects on the BNB Chain, leading to unnecessary damage to the market, Venus, its users, and the BNB token.
So, BNB Chain comes to the rescue once again, but it does beg the question: what would we do without them? Only time will tell.
Image provided by Unsplash
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
Our quick analysis:
The BNB Chain core team has come to the aid of Venus Protocol by taking over its $150 million Binance Coin (BNB) loan position as it approached the liquidation threshold. The loan was initially owned by a hacker who breached the cross-chain infrastructure on the BNB Chain in October 2022, leading to a loss of over $100 million in crypto assets.
To prevent a shortfall on Venus and provide additional support during the process, the BNB Chain team sent $30 million in Tether (USDT) to the whitelisted wallet exclusively permitted to execute the liquidation. The wallet was chosen via a governance proposal released a month after the BNB Chain hack.
During the attack, the hacker manipulated security proofs and minted two million BNB tokens, worth $560 million at the time. The hacker took advantage of the vulnerability related to the "iavl hash check" within the BNB cross-chain bridge. With the stolen BNB, the hacker borrowed $150 million worth of USDT and USD Coin (USDC), leveraging a 900,000 BNB position against Venus.
The Venus team stated that "the whitelisted wallet was initially funded with $30M in USDT with the assurance of preventing shortfall on Venus and providing additional support through this Venus governance approved mechanism."
The BNB Chain team executed a hard fork after the hack to secure the bridge between the BNB Beacon Chain and the BNB Smart Chain. Due to the deteriorating health rate of the loan and the potential of a further drop in BNB's price, the whitelisted wallet has begun preparations to liquidate the position. Without the wallet's intervention, liquidating the loan may cause cascading effects on the BNB Chain, leading to unnecessary damage to the market, Venus, its users, and the BNB token.
So, BNB Chain comes to the rescue once again, but it does beg the question: what would we do without them? Only time will tell.
Image provided by Unsplash
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
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Please, behave!