Loading...

Venus protocol’s DeFi recovery: Addressing the $270K Oracle issue

TL;DR

  • Venus Protocol responds swiftly to $270K oracle incident.
  • User funds remain secure amidst DeFi challenges.
  • Treasury funds to patch the gap.

Decentralized finance (DeFi) platform Venus recently encountered a challenge with one of its price feed oracles, resulting in approximately $270,000 in borrowed funds in December. 

While some initially described it as an exploit, Venus clarified that the issue was related to an Oracle malfunction and that user funds remained secure. The protocol has pledged to replenish the affected pool with treasury funds.

Oracle malfunction impacts Venus protocol

reports emerged that the Binance Smart Chain-based Venus Protocol, which facilitates decentralized lending and borrowing, faced issues related to a malfunctioning price oracle. Twitter user SaulCapital alerted his followers to the situation, highlighting that an isolated pool on Venus Protocol designed for liquid staked Binance Coin (BNB) had been exploited. A suspect wallet address associated with the incident held nearly $260,000 at the time of writing.

In response, Venus Protocol ambassador NoOneVII clarified that the problem appeared to stem from an “Oracle price issue” occurring within a small isolated market. He emphasized that the core pool and other pools remained unaffected and reassured the community about the protocol’s security.

Head of Venus Labs, known as Brad, corroborated the explanation, confirming that the Binance oracle, supporting the snBNB asset in the isolated pool, had reported an incorrect price, leading to approximately $200,000 in borrowed funds.

Venus protocol’s response and assurance

Venus Protocol issued a statement promising to share more details shortly. The protocol assured its users that the snBNB price feed had returned to normal, and the core pool and other markets remained unaffected. They also emphasized that user funds were “SAFU” (Safe and Secure Fund Usage).

Additionally, Venus Protocol announced its commitment to address the issue by proposing to inject liquidity from the treasury into the affected pool, amounting to approximately $274,000. These funds would be used while efforts were made to recover the funds from the affected pool, with the support of partners.

As of the time of writing, the total value locked in the Venus Protocol, launched in 2020, remained unaffected, standing at $738 million according to DefiLlama.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

Share link:

Lacton Muriuki

Lacton is an experienced journalist specializing in blockchain-based technologies, including NFTs and cryptocurrency. He dabbles in daily crypto news rich with well-researched stats. He adds aesthetic appeal, adding a human face to technology.

Most read

Loading Most Read articles...

Stay on top of crypto news, get daily updates in your inbox

Related News

Safe Acquires Multis: Strategic initiation to Elevate Cryptocoin treasury management
Cryptopolitan
Subscribe to CryptoPolitan