Crypto market observers are currently focusing on the Venus Protocol this week as the protocol grapples with a possible liquidation of binance coin (BNB). The hacker who exploited the BNB blockchain managed to secure $150 million in stablecoins through the use of Venus. If the price of BNB slips to $220 per unit, the position will be liquidated.
Crypto Community Focuses on Venus Protocol’s Role in BNB Liquidation Risk
The cryptocurrency community has been engaged in discussions about the Venus Protocol, a decentralized finance (defi) application for lenders and borrowers. Last year, during the attack on the BNB blockchain, a hacker managed to acquire $150 million in stablecoins from the Venus Protocol, utilizing 900,000 BNB.
The position is currently still active, but it is at risk of being liquidated, causing concerns about potential disruptions in the BNB ecosystem. To trigger the liquidation, BNB must drop below the $220 per unit threshold. Presently, BNB is being traded at prices ranging from $222.23 to $238.20 per unit. Over the past week, BNB has experienced a decline of 22.3% in its value, and it currently stands 66.01% below its all-time price high.
The Venus Protocol addressed the matter on Twitter, stating: “In November 2022, @BNBCHAIN submitted a governance proposal which was passed by the community to whitelist liquidation of the BNB Bridge exploiter’s position exclusively to @BNBChain core team for the purpose of securing the misappropriated assets and preventing any further impact and sell off from liquidating.”
Venus Protocol announced that the whitelisted wallet received initial funding of $30 million in USDT. The funding was intended to mitigate potential deficiencies on Venus and provide additional backing through the Venus governance-approved mechanism. However, the Twitter account subsequently deleted a prior tweet which said:
@BNBChain core team is ready to take over the $BNB position on Venus as planned if the BNB price hits the liquidation threshold. The liquidator address has prepared $30M already to refund the account loans with more to come if needed. No BNB will be dumped into the market and no shortfall is expected on Venus.
Venus Protocol addressed an individual who shared a screenshot of the now-deleted tweet, stating, “A new tweet was published to give readers more context and a link to the actual governance proposal explaining the mechanism for more transparency.” With BNB reaching $222.23 during today’s trading sessions, it has come dangerously close to the liquidation threshold.
What do you think about the liquidation Venus Protocol faces? Share your thoughts and opinions about this subject in the comments section below.
