1/9
Today we have witnessed the manipulation of XVS price — the governance token of Venus Protocol on BSC.
This incident resulted in $200M+ DeFi liquidations and a $100M+ of protocol bad debt.
As usual, let’s analyze this situation below👇
Today we have witnessed the manipulation of XVS price — the governance token of Venus Protocol on BSC.
This incident resulted in $200M+ DeFi liquidations and a $100M+ of protocol bad debt.
As usual, let’s analyze this situation below👇
2/9
The previous record for liquidation volume was held by Compound after the DAI price oracle incident ($88M).
Back then, Compound Open Price Feed was heavily criticized by the Chainlink community, but virtually the same manipulation was just done even with Chainlink.
The previous record for liquidation volume was held by Compound after the DAI price oracle incident ($88M).
Back then, Compound Open Price Feed was heavily criticized by the Chainlink community, but virtually the same manipulation was just done even with Chainlink.
3/9
The price in the oracle was able to almost double, which allowed at least two Venus accounts to borrow a large number of assets.
It is not clear where exactly Chainlink gets the price data for XVS but given there is basically only one liquid market, it doesn’t matter much.
The price in the oracle was able to almost double, which allowed at least two Venus accounts to borrow a large number of assets.
It is not clear where exactly Chainlink gets the price data for XVS but given there is basically only one liquid market, it doesn’t matter much.
4/9
One of the smart exploiters left Venus with $80M bad debt in BTC that they will never repay.
All their collateral has already been liquidated, so there is no point in someone repaying their debt.
One of the smart exploiters left Venus with $80M bad debt in BTC that they will never repay.
All their collateral has already been liquidated, so there is no point in someone repaying their debt.
5/9
They withdrew from Binance and used almost 1M XVS ($52M at current price) as collateral during the peak price.
From the protocol, they could borrow 4.2k BTC ($165M), which they sent to the BSC Token Hub.
They withdrew from Binance and used almost 1M XVS ($52M at current price) as collateral during the peak price.
From the protocol, they could borrow 4.2k BTC ($165M), which they sent to the BSC Token Hub.
6/9
The second guy was a little late (copycat?).
However, this did not stop them from creating $17M of bad debt to Venus.
The second guy was a little late (copycat?).
However, this did not stop them from creating $17M of bad debt to Venus.
7/9
They also withdrew about 490k XVS ($28M at current price) from Binance to be used as collateral.
They also sent borrowed 13.4k ETH ($39M) to the Token Hub.
They also withdrew about 490k XVS ($28M at current price) from Binance to be used as collateral.
They also sent borrowed 13.4k ETH ($39M) to the Token Hub.
8/9
These funds here were lost not by those who were supposed to become liquidation’ victims but by ordinary protocol users who deposit money in it.
Until Venus finds a way to get rid of the bad debt, the protocol is undercollateralized, and the bank run will be challenging.
These funds here were lost not by those who were supposed to become liquidation’ victims but by ordinary protocol users who deposit money in it.
Until Venus finds a way to get rid of the bad debt, the protocol is undercollateralized, and the bank run will be challenging.
9/9
I am sure that the actual damage from this case is greater than this figure, but the continuation of the analysis takes more time.
Perhaps later, I will find time to calculate all losses, as I did with Black Thursday.
@whiterabbit_hq/black-thursday-for-makerdao-8-32-million-was-liquidated-for-0-dai-36b83cac56b6" target="_blank" rel="noopener" onclick="event.stopPropagation()">medium.com
I am sure that the actual damage from this case is greater than this figure, but the continuation of the analysis takes more time.
Perhaps later, I will find time to calculate all losses, as I did with Black Thursday.
@whiterabbit_hq/black-thursday-for-makerdao-8-32-million-was-liquidated-for-0-dai-36b83cac56b6" target="_blank" rel="noopener" onclick="event.stopPropagation()">medium.com
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