Crypto Exchange Crypto Exchange
Ctrl+D Crypto Exchange

An article to understand the largest liquidation event of the DeFi protocol so far: Venus



The Venus protocol faced a massive liquidation of more than $200 million on Wednesday due to alleged price manipulation of its native token XVS.

For those who don't know much about the Venus protocol, let's give a simple explanation first. The Venus protocol provides decentralized financial lending services on the Binance Smart Chain, allowing users to borrow funds using XVS tokens as collateral. As required by the Venus protocol, the value of borrowed funds must always be lower than the value of the collateral provided.

The main reason for the large-scale liquidation this time is because of the price surge and subsequent crash. The price of XVS tokens rose by nearly 90% at midnight on Wednesday, Eastern Time, from $76 to $144, which means that Users only need to pay few tokens to stake, and then can borrow more funds and other tokens, such as bitcoin and ether, on the Venus protocol.

BTC/GBP traded at $881M yesterday: Jinse Finance reports that Bitcoin/GBP traded at $881M yesterday (average $70M), when the fiat Investors favor Bitcoin when currencies are under threat. [2022/9/28 5:58:47]

But soon, prices in the cryptocurrency market plummeted, resulting in many people taking out loans with insufficient collateral value. However, many people who borrowed on the Venus protocol did not pay back their loans in time, choosing to keep their newly acquired tokens and default on their loans. The protocol then works as expected to liquidate the remaining collateral.

Report: East Africa unlikely to introduce a single currency by 2024: The central bank from the African Economic Union East African Community (EAC) is unsure whether plans to introduce a single currency for the region by 2024 will materialize, Jinse Finance reported. The central banks point to the failure of some members to meet the targets set out in the road map as one reason why the single currency is unlikely to take off as planned.

According to a report in East Africa, the six members of the East African Community hope that the envisaged common currency will help reduce the cost of exchanging currencies. It is also hoped that a single currency will eliminate exchange rate fluctuations from cross-border trade. Achieving a single currency is one of the EAC's priorities for the period 2022-2026.

Meanwhile, in a communiqué published on Aug. 22, the EAC reportedly confirmed that delays and other challenges meant the regional bloc would not be able to have a single currency by 2024 as planned. (news.bitcoin) [2022/8/25 12:48:18]

But the problem is, because the entire cryptocurrency market has been in a downturn, the value of many collaterals has also plummeted, so that even after the sale of the Venus agreement, the value of the collateral is still far below the original loan value-as a result, Venus generated More than $95 million in bad debts, including:

Data: 155,000 NFT assets were added to the Arbitrum network in the last week: According to news on June 29, according to Arbitrum NFT Scan browser data, 155,000 NFT assets were added to the Arbitrum network in the past week, with an average of 22,000 NFTs added every day. The growth trend is obvious. [2022/6/29 1:38:55]

* 2,000 bitcoins (worth nearly $79 million at current prices)

* 5,700 Ethereum (worth nearly $17 million at current prices)

Bad debt, which means that the Venus protocol cannot obtain accounts receivable from users.

Joselito Lizarondo is the founder of the Venus protocol and the founder of Swipe, a crypto wallet and debit card provider owned by Binance. According to him, there are two main reasons for the soaring price of XVS:

1. A large number of market orders appear in a short period of time

2. Limited token supply (because many users staked XVS tokens)

Most of the XVS token transactions occur on the Binance Exchange. The Block Research analyst Igor Igamberdiev said that cryptocurrency exchanges are usually known for their high liquidity, but for XVS, the liquidity of this cryptocurrency is not. The price is not high, so its price can be easily manipulated. At the same time, the Venus protocol still approved more loans when the price of XVS tokens skyrocketed.

However, Joselito Lizarondo, the founder of the Venus protocol, claimed that the protocol is functioning as expected and that "no funds have been lost." At the same time, he also admitted that there is a problem of bad debts, and pointed out that the Venus protocol will use its grant program and "use XVS tokens" to make up for it. the gap.

In fact, in the cryptocurrency market, it is not uncommon for the Venus protocol to generate a large number of liquidations and generate bad debts:

In November 2020, the price of the stablecoin DAI skyrocketed, resulting in a liquidation fund of up to $88 million in the DeFi protocol Compound.

On "Black Thursday", March 12, 2020, the cryptocurrency market plummeted, and the structure caused the liquidation value of the DeFi protocol MakerDAO to exceed 8 million US dollars.

Judging from the current statistical data, the scale of liquidation funds triggered by the Venus agreement this time may be the highest in the history of DeFi so far.

From | The Block, compiled | PANews


Binance App Download
A quick overview of DeFi data for a week (5.11-5.17)

Jinse Finance reported that according to data from OKLink, affected by the market downturn.

Report: Goldman Sachs researching cryptocurrencies as an asset class

Goldman Sachs, a major U.S. investment bank, appears to have recognized that cryptocurrencies are an emerging new asset class.

Six differences between Liquid Network and Lightning Network

The Layer 2 protocol broadens the options for Bitcoin users. They enable Bitcoin's scalability enhancements, including lower transaction costs, increased speed.

An article to understand the largest liquidation event of the DeFi protocol so far: Venus

The Venus protocol faced a massive liquidation of more than $200 million on Wednesday due to alleged price manipulation of its native token XVS.For those who don't know much about the Venus protocol.

First release | Follow-up trend analysis of blockchain after 521

This article was originally created by the little brother of Future.

2021.520 Special: The Voice of Boyfriends in the "Currency Circle" on This Day.

Original Title: 520 Special 丨 The "Secret" Lying in Bed Data: Since 2021, more than 1,500 rounds of early-stage financing have been conducted.

First Release | Ouyi OKEx Intelligence Bureau: The Kusama Parachain Auction is about to start.An in-depth interpretation of the bidding strategies of each parachain

This article was originally created by Ouyi OKEX and authorized by Jinse Finance to publish. We have been looking forward to Kusama’s parachain auction for more than half a year.