Kofi Mensah The BNB community is currently closely monitoring the situation surrounding the Venus Protocol, as the protocol faces the possibility of a liquidation involving binance coin (BNB). Recently, a hacker exploited the BNB blockchain and managed to obtain $150 million in stablecoins by leveraging Venus. Should the price of BNB drop to $220 per unit, the position would be subject to liquidation.
Risk of BNB Liquidation Sparks Discussion in Crypto Community
Discussions within the cryptocurrency community have been revolving around the Venus Protocol, a decentralized finance (defi) application designed for lenders and borrowers. Last year, during an attack on the BNB blockchain, a hacker successfully acquired $150 million in stablecoins from the Venus Protocol, utilizing 900,000 BNB.
The position in question is currently active but faces the risk of liquidation, which raises concerns about potential disruptions in the BNB ecosystem. For the liquidation to be triggered, the price of BNB must fall below the $220 per unit threshold. At present, BNB is being traded within the range of $222.23 to $238.20 per unit. Over the past week, BNB has experienced a decline in value of 22.3% and is currently standing at 66.01% below its all-time price high.
In response to the situation, the Venus Protocol issued a statement on Twitter, saying: “In November 2022, @BNBCHAIN submitted a governance proposal that was approved by the community, allowing the whitelisting of the BNB Bridge exploiter’s position exclusively to @BNBChain’s core team. This step was taken to secure the misappropriated assets and prevent any further impact and sell-off resulting from liquidation.”
The Venus Protocol announced that the whitelisted wallet received an initial funding of $30 million in USDT. The funding was intended to address potential shortcomings on Venus and provide additional support through the Venus governance-approved mechanism. However, the protocol later deleted a previous tweet which stated:
“The @BNBChain core team is prepared to take over the $BNB position on Venus as planned if the BNB price reaches the liquidation threshold. The liquidator address has already prepared $30M to refund the account loans, with more funds available if necessary. There will be no BNB dumped into the market, and no shortfall is expected on Venus.”
Responding to an individual who shared a screenshot of the now-deleted tweet, the Venus Protocol clarified, “A new tweet was published to offer readers more context and a link to the actual governance proposal explaining the mechanism for greater transparency.” With BNB reaching $222.23 during today’s trading sessions, it has come dangerously close to the liquidation threshold.
Feel free to share your thoughts and opinions on the potential Venus Protocol liquidation in the comments section below.
Table Of Contents
Frequently Asked Questions (FAQs) about liquidation
What is the Venus Protocol and why is it in the spotlight?
The Venus Protocol is a decentralized finance (defi) application for lenders and borrowers. It has recently garnered attention due to its potential liquidation involving binance coin (BNB) and concerns about disruptions in the BNB ecosystem.
How much stablecoins did the hacker acquire through Venus Protocol?
The hacker managed to secure $150 million in stablecoins by exploiting the BNB blockchain through the Venus Protocol.
What is the liquidation threshold for the BNB position?
For the position to be liquidated, the price of BNB needs to drop below $220 per unit.
What actions has the Venus Protocol taken to address the potential liquidation?
The Venus Protocol submitted a governance proposal that was passed by the community, allowing the whitelisting of the BNB Bridge exploiter’s position exclusively to the BNB Chain core team. They received initial funding of $30 million in USDT to secure the misappropriated assets and prevent further impact and sell-off.
What is the current value of BNB and its decline?
BNB is currently being traded between $222.23 and $238.20 per unit. Over the past week, it has experienced a decline of 22.3% in value and stands 66.01% below its all-time price high.
Is there a potential shortfall or market dumping of BNB expected?
According to a deleted tweet, the BNB Chain core team stated that no BNB will be dumped into the market, and no shortfall is expected on Venus. However, the situation remains uncertain.
How close is BNB to the liquidation threshold?
During today’s trading sessions, BNB reached $222.23, dangerously close to the liquidation threshold of $220 per unit.
What is the response of the crypto community to this situation?
The crypto community is actively discussing the potential liquidation and its implications for the Venus Protocol and BNB ecosystem.
More about liquidation
- Venus Protocol Official Website
- Binance Coin (BNB) Official Website
- Venus Protocol Governance Proposal
- Decentralized Finance (DeFi) Explained
- Understanding Stablecoins
