Venus Protocol, a prominent lending market on the BNB Chain, has denied allegations of a major security breach over the past weekend.
These speculations initially suggested a $54 billion exploit, as blockchain security firm SlowMist reported.
Venus Protocol Refutes Claims of Major Exploit
Brad Harrison, the Head of Venus Labs, addressed these concerns on December 10 through a post on X.
Some facts:
Binance Oracle, which supports the asset of snBNB in the *isolated* pool reported a wrong price resulting in about $200k of borrows. This is the only reported issue.
This user is associated with a Binance account.
There’s no issue with the core pool or otherwise.
— Brad 🫀/acc (@bradherenow) December 10, 2023
He clarified that the incident was not an exploit of Venus Protocol but rather a misreporting of prices by Binance Oracle, a decentralized application instrumental in providing external data to smart contracts. This error led to approximately $200,000 in unwarranted borrows, a figure markedly lower than the rumored billions.
Harrison reassured investors and users that the issue was isolated and no other pools within the Venus ecosystem were affected. He emphasized the team’s commitment to bolstering security, particularly in isolated pools, through enhanced support for price resilience mechanisms.
This announcement came after a post by Slow Mist, which initially alleged a loss due to an exploit in Venus Protocol.
It seems @VenusProtocol has been exploited.
Please proceed with caution! pic.twitter.com/Ufxxk4IWTW
— SlowMist (@SlowMist_Team) December 10, 2023
Further details revealed by Venus Protocol highlighted that the mispricing affected snBNB, a yield-bearing liquid-staked version of BNB, leading to a user inadvertently borrowing around $270,000 worth of assets.
Venus Protocol Takes Action Following Oracle Error
In response, Venus Protocol has temporarily paused the snBNB market and two other markets – agEUR and stkBNB – as a precautionary measure. These markets share similar configurations with the Binance Oracle.
Venus Protocol has also announced plans to infuse approximately $274,000 from its treasury into the affected pool. This will be complemented by efforts to recover funds in collaboration with partners.
Following the @chaos_labs recommendations and out of an abundance of caution due to today’s Binance Oracle price feed issue on the Isolated LST BNB Pool, the snBNB market has been temporarily paused along with 2 other *isolated* markets (agEUR, stkBNB) with similar Binance…
— Venus Protocol (@VenusProtocol) December 10, 2023
The Binance Oracle team has reportedly resolved the issue, “It is also worth mentioning that the Binance Oracle team has already identified and fixed the issue, and this is strictly a precautionary temporary measure,” they further noted.
Despite these assurances and swift action, the native token of Venus Protocol, XVS, experienced a drop in value, plunging over 12% to $9.43, according to CoinGecko data.
Venus Protocol, similar to decentralized finance platforms such as Aave and Compound, allows users to lend, borrow, and swap various cryptocurrencies.
It is a pivotal player in the DeFi space, particularly on the BNB Chain, showcasing the dynamic and responsive nature of blockchain-based financial ecosystems.
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