The BNB Chain saga just took a wild turn. Remember that notorious wallet that borrowed a jaw-dropping $150 million in stablecoins from Venus Protocol? As BNB prices took a nosedive to $209, that wallet got a rude awakening. Over 6.89 million Venus BNB (vBNB) tokens were liquidated, which translates to a cool $30 million. And guess who likely did the deed? The BNB Chain developer team, following a governance vote from November 2022.
But let’s rewind a bit. What’s liquidation, you ask? Picture this: you’re on an exchange, and you’ve taken a leveraged position. But things go south, and you can’t meet the margin requirements. The business then forcefully closes your work. That’s liquidation in a nutshell. And it could be a more fun ride.
This isn’t the first time our mysterious exploiter has faced such a fate. Last week, a whopping $60 million of their loan was liquidated in two separate transactions. Talk about bad luck, right?
But here’s where things get spicy. Venus, the platform at the heart of this drama, operates on the BNB Chain network. It’s sitting on a treasure trove of over $620 million tokens. Out of this, users have borrowed $480 million. And one of these borrowers is our infamous BNB Chain exploiter. Last year, this sneaky player managed to snatch over $100 million in BNB tokens by exploiting a bridge on the BNB Chain. They then waltzed to the Venus lending protocol and borrowed $150 million in stablecoins. But this massive loan was on the brink of liquidation, with BNB prices playing hide and seek (primarily hide) over the past year. And if that happened? BNB prices could’ve crashed, causing chaos in the crypto world.
This potential disaster had Venus and BNB Chain scrambling for a solution. Venus, in a proposal from November 2022, expressed concerns about the market’s volatility. They were worried that liquidating a chunk of BNB could create a domino effect, causing more liquidations and wreaking havoc in the market. This could spell doom for Venus, its users, the BNB token, and the entire BNB Chain. So, what did they do? They teamed up with Binance and other BNB Chain bigwigs to tackle the situation head-on. Their game plan? Repay the debt collectively and ensure Venus’s stability.
