BNB Chain Exploiter Liquidated for $30M on Venus Protocol

#PeckShieldAlert The #BNBBridge Exploiter’s position has been liquidated for ~6.89M $vBNB. The liquidator has repaid 30M $USDT. pic.twitter.com/yokVbIGuS3

— PeckShieldAlert (@PeckShieldAlert) August 21, 2023

Monday’s liquidation follows a similar event from last week where $60 million worth of the exploiter’s loan was liquidated across two transactions.

Why is BNB Chain protecting Venus?

Venus runs on the BNB Chain network. It holds over $620 million worth of various tokens from which $480 million has been borrowed by users.

One of these borrowers is a wallet connected to the notorious BNB Chain exploiter. Last year, an attacker managed to steal over $100 million in bnb tokens by exploiting a bridge, a tool that transfers tokens between various networks, based on the BNB Chain.

The unknown attacker then deposited bnb tokens on the Venus lending protocol to borrow $150 million worth of stablecoins. However, with bnb prices steadily falling in the past year, the massive loan has recently been close to being liquidated – a move that could send bnb prices quickly tumbling as the token is sold in the open market to save the loan.

Such a collapse could even be tumultuous for the multibillion-dollar decentralized finance ecosystem built on BNB Chain. This is why Venus and BNB Chain are working together to prevent such a move.

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“As market is very volatile, there is a potential risk that if liquidated, this large portion of BNB may cause more cascading liquidations effect and unnecessary damage to the market and cause more risks to Venus, Venus users, BNB token and BNB Chain,” Venus said in a since-passed proposal in November 2022, where BNB Chain was appointed as the sole liquidator of the BNB Chain exploiter address.

“We will work with Binance and other BNB Chain Ecosystem players to take over the position in case it hits the liquidation line, by repaying the debt in a joint effort. The stability and fund coverage of Venus will be put at the high priority,” the proposal explained at the time.