Venus Protocol To Recover $270,000 Following Price Oracle Glitch

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Key Takeaways

  • Twitter users pointed out an exploited isolated pool on Venus Protocol for liquid-staked BNB.
  • A short-term price discrepancy occurred with the Binance Oracle responsible for price feeds in an isolated pool.

In a recent turn of events, Venus Protocol, a decentralized finance (DeFi) platform running on the Binance Chain, found itself in the midst of a price oracle hiccup that resulted in borrowed funds totaling approximately $270,000 on December 11.

Despite initial reports of an “exploit” circulating in the crypto community, Venus has clarified that the incident stemmed from a temporary glitch in one of its price feed oracles and not a security breach.

On December 10, concerns arose as reports surfaced about a malfunctioning price oracle affecting the Binance Chain-based lending and borrowing marketplace. Initial estimations, fueled by blockchain security firm SlowMist, suggested a staggering $54 billion exploit. Venus Protocol swiftly took to social media to debunk these claims, emphasizing that the platform was functioning as intended.

A Twitter user with the handle ‘@SaulCapital’ initially flagged the issue, pointing out an exploited isolated pool on Venus Protocol for liquid-staked BNB. However, Venus Protocol ambassador ‘@NoOneVII’ clarified that it was an “Oracle price issue” isolated to a small market, reassuring the community that other pools were unaffected, and security remained intact.

Brad Harrison, the head of Venus Labs, shed light on the situation, explaining that a short-term price discrepancy occurred with the Binance Oracle responsible for price feeds in an isolated pool. Specifically, the oracle supporting the price of snBNB, a yield-bearing liquid staked version of BNB, reported an incorrect price within the protocol’s isolated pool.

Brad Harrison further confirmed that Binance Oracle’s erroneous price report led to approximately $200,000 in borrowed funds. Venus Protocol assured users that the snBNB price feed had returned to normal, with the core pool and other markets remaining unaffected. The incident prompted the team to propose injecting liquidity from the treasury into the affected pool, totalling around $274,000, while actively working with partners to recover funds.

As of now, the total value locked in Venus Protocol, launched in 2020, appears unaffected by the incident, standing at $738 million. The team committed to sharing more details shortly, emphasizing the security of users’ funds and assuring the community that “funds are SAFU” (Secure Asset Fund for Users).

In response to the situation, the Venus community is set to issue a proposal to promptly replenish liquidity from the treasury, demonstrating a proactive approach to resolving the aftermath of the glitch.

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Saniya Raahath
Saniya Raahath

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