Venus Protocol, a major lending marketplace on the BNB chain, denied allegations of a major security breach over the past weekend.
These speculations initially suggested a $54 billion exploit, as reported by blockchain security firm SlowMist.
Venus Protocol denies claims of major exploit
Brad Harrison, director of Venus Labs, addressed these concerns on December 10 in an article on X.
Binance Oracle, which supports snBNB’s asset in the *isolated* pool, reported mispricing resulting in approximately $200,000 in borrowings. This is the only problem reported.
This user is associated with a Binance account.
There is no problem with the main pool or anything.
– Brad 🫀/acc (@bradherenow) December 10, 2023
He clarified that the incident was not an exploit of the Venus protocol but rather a misreporting of prices by Binance Oracle, a decentralized application helping to provide external data to smart contracts. This error led to approximately $200,000 in unjustified borrowing, significantly less than the billions announced.
Harrison reassured investors and users that the issue was isolated and that no other pools in the Venus ecosystem were affected. He highlighted the team’s commitment to strengthening security, particularly in isolated basins, through increased support for price resilience mechanisms.
This announcement follows a post from Slow Mist, which initially alleged a loss due to an exploit in the Venus protocol.
It seems @VenusProtocol was exploited.
Please proceed with caution! pic.twitter.com/Ufxxk4IWTW
– SlowMist (@SlowMist_Team) December 10, 2023
Further details revealed by Venus Protocol highlighted that the misvaluation affected snBNB, a liquid yield version of BNB, leading one user to inadvertently borrow around $270,000 in assets.
Venus Protocol Takes Action Following Oracle Error
In response, Venus Protocol temporarily suspended the snBNB market and two other markets – agEUR and stkBNB – as a precautionary measure. These markets share similar setups with Binance Oracle.
Venus Protocol also announced plans to inject approximately $274,000 of its treasury into the relevant pool. This will be complemented by fund recovery efforts in collaboration with partners.
Following the @chaos_labs recommendations and out of an abundance of caution due to the current Binance Oracle price feed issue on the LST BNB isolated pool, the snBNB market has been temporarily suspended along with 2 other *isolated* markets (agEUR, stkBNB) with Binance similar…
– Venus Protocol (@VenusProtocol) December 10, 2023
The Binance Oracle team reportedly fixed the issue: “It is also worth mentioning that the Binance Oracle team has already identified and resolved the issue, and this is strictly a temporary precautionary measure,” they added.
Despite these assurances and rapid action, the Venus Protocol’s native token, XVS, saw a decline in value, plunging more than 12% to $9.43, according to CoinGecko. data.
The Venus Protocol, similar to decentralized finance platforms such as Aave and Compound, allows users to lend, borrow and trade various cryptocurrencies.
It is a central player in the DeFi space, particularly on the BNB chain, demonstrating the dynamic and responsive nature of blockchain-based financial ecosystems.
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