How Did the Venus Protocol Attack Happen?

On-chain data reveals that the attack was carried out using a highly planned and complex strategy. According to analyses, the attacker used an address beginning with 0x1a35 and spent a long period preparing within the system. Research indicates that over approximately nine months, the attacker gradually accumulated around 84% of the THE token supply (about 14.5 million tokens) while quietly attempting to gain control over market liquidity. The actual exploit began when the tokens were transferred directly to the protocol contract. With this method, the attacker managed to bypass the platform’s normal deposit and supply cap control mechanisms. As a result, a collateral position far exceeding the system’s allowed limits was created. Ultimately, the attacker established a massive collateral position reaching approximately 3.7 times the permitted limit, enabling them to borrow a significant amount of assets from the protocol.

Using the inflated collateral value, the attacker borrowed large amounts of crypto assets from the protocol. According to blockchain analysis, the assets taken included:

• 20 BTC (Bitcoin)
• 1.58 million USDC
• 801 BNB
• 6.67 million CAKE tokens

As a result of these transactions, the total loss was reported to exceed $3.7 million.

Price Manipulation and THE Token Collapse

One of the strategies used during the attack involved price manipulation. After borrowing assets from the protocol using THE tokens as collateral, the attacker bought more THE tokens from the market to increase the collateral value. The goal was to wait for the oracle price mechanism to update, artificially inflating the collateral value and enabling the withdrawal of even more assets from the system. During this manipulation process, the THE token price rose from approximately $0.26 to $0.56. However, once the liquidation process began, heavy selling pressure quickly emerged in the market, causing the token price to drop sharply to around $0.22. Following the incident, market confidence declined, and the THE token lost more than 17% of its value within 24 hours.

After the attack, the Venus Protocol team quickly implemented several security measures. In a statement, the platform said:

“While we continue investigating unusual activity in the THE pool, we have temporarily suspended all THE borrowing and withdrawal operations to prevent further abuse.”

Additionally, the platform temporarily paused operations in several markets with high liquidity concentrations, including BCH, LTC, UNI, AAVE, FIL, and TWT.

DeFi Security Back in the Spotlight

This incident once again highlights that security vulnerabilities remain a significant risk in the DeFi ecosystem. As the industry grows, attack methods are becoming increasingly sophisticated. According to data from blockchain security firm PeckShield, total losses from crypto hacks fell to $49 million in February, marking the lowest level in the past year. However, phishing and social engineering attacks have increased during the same period. Experts emphasize that DeFi platforms need stronger security measures, particularly in critical areas such as supply caps, oracle price mechanisms, and collateral systems. The Venus Protocol attack once again exposed the security risks faced by decentralized finance platforms. The exploit, which resulted in a $3.7 million loss, demonstrates that supply cap manipulation and the abuse of pricing mechanisms continue to pose serious threats to DeFi protocols. Experts stress that strengthening security infrastructure is crucial for maintaining investor confidence in the DeFi ecosystem.

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The post Hack Shock in the Crypto Market: The Price Dropped Sharply! appeared first on Coin Engineer.

According to data from blockchain analysis firm 0xScope, Justin Sun has again made an altcoin purchase. According to the shared data, Sun is actively interested in the cryptocurrency XVS.

.@justinsuntron withdrew 71K $XVS($805K) from #Binance, in the past 7 days, he received 621K $XVS($7.1M) from #Binance in total.

address:https://t.co/4esB5xkMrs

Follow @ScopeProtocol and @0xScopescan for more updates. pic.twitter.com/LGOc7iwPka

— Scopescan (@0xScopescan) January 24, 2024

Over the past seven days, Justin Sun has initiated a withdrawal transaction that includes 71,000 XVS worth $805,000 from the major cryptocurrency exchange Binance. This move follows a series of transactions in which Justin Sun has purchased a total of 621,000 XVS worth $7.1 million from Binance.

Justin Sun has previously made altcoin purchases through Binance, including transactions on the altcoins AAVE, LINK, FLOKI, MANA, SHIB, and BANT.

Venus Protocol (XVS), an algorithmic money market system, operates on the BNB Chain. This innovative platform offers users a decentralized and secure way to lend and borrow cryptocurrency. This platform, based on high technology, is fully utilizing the potential of the cryptocurrency market.

To learn more about XVS, please read our review by clicking here.

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The best thing is that it’s easy to connect to Venus Protocol using digital wallets like MetaMask. This makes it simple and accessible for everyone to use. The system has its own special token called XVS. If you stake this token in the Venus Protocol Vault, you can earn rewards. Plus, this gives you control and ownership over Venus Protocol.

You might like it: What is JasmyCoin (JASMY)? Where can we buy it?

Since it’s decentralized, the community using Venus Protocol can manage and control the system. This is a big deal for the cryptocurrency market.

In summary, Venus Protocol is outstanding in the cryptocurrency world. It’s secure, user-friendly, and decentralized. It also lets users own and control the system through the XVS governance token. If you’re into cryptocurrencies, Venus Protocol is a great option to consider.

When Was Venus Protocol Released?

Venus Protocol (XVS) is a project that started in 2020, created by the team at Swipe, a global cryptocurrency credit card company. The goal of this project is to connect traditional finance with DeFi (decentralized finance). It runs on BNB Chain, which is Binance’s own blockchain, and it offers an alternative that avoids the issues found in Ethereum.

People who hold XVS tokens have control over the protocol and token because Swipe supported its development. This means users can directly influence how the system works, which is pretty cool.

Token Economy

1. Risk Fund (40%): This fund helps address any problems that might happen in the protocol, especially if there are issues with liquidation. The allocation of this fund ensures the protocol has a strong financial backup.
2. Treasury Reserve (40%): This reserve makes the protocol more resilient and acts as a safety net for its ongoing operations.
3. XVS Vault Rewards (10%): Venus Protocol encourages users by offering rewards through the XVS Vault.
4. Venus Prime Token Program (10%): This program uses part of the reserve revenue to engage users and increase APYs (Annual Percentage Yields) for qualified users in the main market.

If you want to buy Venus Protocol (XVS) coins, you can find them on many major cryptocurrency exchanges. The easiest way to get them is through the Binance exchange. You can register on Binance with a 20% commission discount using the link provided. There are also other exchanges where you can buy XVS coins with reduced commissions listed below:

➔ KuCoin

➔ Gate.io

➔ MEXC

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