Golden Sentinel | Vulnerabilities or project shipments? BSC’s largest lending platform, Venus, was raised nearly 100 million US dollars

Venus, the largest lending platform on the Binance Smart Chain, is in another crisis.

On the evening of May 18, 2021, a giant whale spent tens of millions of dollars in a short period of time to double the price of XVS from more than 70 dollars to 144 dollars, and then used the raised price of XVS as collateral with a pledge rate of 80%. Lent 4,100 bitcoins and nearly 10,000 ethereums.

Subsequently, the XVS currency price fell back, leading to the serial liquidation of the pledged XVS, and Venus formed a bad debt of nearly 100 million US dollars.

Weibo user Blockchain Wang Dayou observed the whale's movements. Blockchain Wang Dayou posted at 3 o'clock in the morning:

A large Venus user lent 4100 pies and 9600 ether at the high price of xvs, which will continue to be liquidated. The liquidated xvs thrown into the market may cause a series of declines in currency prices. Now I don’t know if it’s a bug or deliberately raised the xvs last night as collateral to increase the loanable amount (how can this big family have nearly 200,000 xvs).

Jinse Finance mining data broadcast | ETH's network computing power dropped by 3.80% today: Jinse Finance reported that according to the data of the spider mining pool:

The computing power of the BTC network is 126.885EH/s, the mining difficulty is 17.60T, the current block height is 657283, and the theoretical income is 0.00000772/T/day.

The computing power of the entire ETH network is 263.369TH/s, the mining difficulty is 3391.75T, the current block height is 11272577, and the theoretical income is 0.00646677/100MH/day.

The BSV network computing power is 1.080EH/s, the mining difficulty is 0.15T, the current block height is 661609, and the theoretical income is 0.00083320/T/day. [2020/11/17 21:01:21]

Exclusive | Jinse Finance’s Mining Coin Data Report on February 17th: Jinse Finance reported that according to the data of Coinin Mining Pool:

The daily income of mainstream currency mining is: BTC (￥1.13/T), ZEC (￥0.49/T), LTC (￥20.95/G), BSV (￥1.08/T), BCH (￥1.16/T), DASH (￥0.11/G).

The current popular mining machine data and net income are: Whatsminer M20S (BTC, ￥46.91), Antminer Z11 (ZEC, ￥40.94), Innosilicon A4+ (LTC, ￥6.15). [2020/2/17]

Twitter user Jordy Roelofs provided an address 0xEF044206Db68E40520BfA82D45419d498b4bc7Bf, where a large amount of XVS was liquidated.

Jinse Finance live report, Shane Molidor: Positive regulation is a must: At the 2018 World Digital Asset Summit (WDAS) and FBG Annual Conference, Shane Molidor from FBG Capital said that when it comes to regulation, cryptocurrency and blockchain The industry is often afraid. In fact, active-zce supervision is necessary for the ecology of the industry. The industry also needs the emergence of supervision to eliminate projects that fish in troubled waters. [2018/5/3]

In response to this operation of the big XVS, some netizens said that this is actually equivalent to a disguised shipment, and it is a high-priced shipment, because the market depth of XVS is not enough.

Except for the liquidation incident that was artificially exploited by loopholes in the rules, Venus encountered a lending crisis at the beginning of its launch. After Venus went online, the token CAN was randomly added as collateral, which resulted in 3,000 BTC being borrowed short (for details, please refer to the previous article of Jinse Finance).

According to exclusive news from Jinse Finance, Cheetah Mobile Overseas officially announced the launch of SafeWallet, a digital currency wallet: According to exclusive news from Jinse Finance, Cheetah Mobile Overseas officially announced the launch of SafeWallet, a mobile safe digital asset wallet. It is understood that SafeWallet is equipped with a three-layer security defense system, which conducts comprehensive security control in three key areas of user behavior security, mobile phone security defense, and asset security management to maximize the protection of users' digital assets and prevent assets from being lost or stolen. steal. Currently, SafeWallet supports currencies such as Bitcoin (BTC) and Ethereum (ETH). Currently, SafeWallet is available for download on the Google Play Store. [2018/1/31]

As for the Venus liquidation incident, is someone exploiting the loophole or the project party shipped it? The community is skeptical for two main reasons.

1. The total circulation of XVS is 10 million, and this time the giant whale used 2 million XVS; 2. On May 8, the community voted to pass a new proposal to increase the XVS pledge rate from 60% to 80%. The time interval is so close, it has to make people imagine.

The mortgage assets of Venus include: BTCB, ETH, BNB, XVS, SXP, USDT, BUSD, USDC. Two coins that are less common are XVS and SXP. SXP is the token of the Swipe wallet. In the event of using CAN to borrow 3,000 BTC, CAN is the IWO project of the Swipe wallet team. It can be said that the teams behind the three tokens XVS, CAN, and SXP have a close relationship.

On the afternoon of May 19, 2021, Venus issued an article explaining the XVS large liquidation event, "Due to a large number of market orders and expectations for the new reward token VRT, the price of XVS has risen sharply. As a result, Traders pledged and repeatedly lent out more collateral to continue buying XVS. Subsequently, some traders locked in profits from the price rise, causing the price to fall. Due to a large number of XVS being sold, the price dropped sharply, which triggered the XVS market There’s a lot of market liquidation happening in that.”

The liquidation mechanism in the Venus protocol is somewhat similar to the way users use leverage to "go long". Users can use collateral to borrow more collateral to grow positions, and to repurpose and adjust positions. Liquidators in the protocol will look for accounts that have taken out positions that exceed their margin, in this case they will borrow against the limit to liquidate up to 50% of the position and charge a fee of 10%. These liquidators will then sell their seized collateral, in this case XVS, to get back the capital they used to carry out the liquidation. The only problem is that this 10% will fluctuate with market fluctuations, causing greater slippage, which again reduces the price of the seized asset. This will cause continuous liquidation problems. As more liquidations happen, the price drops, and events enter a negative cycle until the liquidations are complete.

According to Venus, “Although the liquidators took full advantage of the shortfall in the balance due to the rapid price drop, Venus will deploy a grant plan using XVS to make up for the shortfall in the system. They will not be sold to the market, and It is leveraged under the supervision of the Venus team. To ensure this does not happen again, every asset supported on Venus will be reviewed and each collateral factor will be safely reduced.”

"In this incident, the Venus protocol worked normally as expected, but the liquidator failed to complete the liquidation in time, which then led to a continuous sell-off in the liquidation market. In the future, a user interface will be created so that more members can participate in the liquidation Work together to share the workload of liquidation.”

In response to this response, some netizens commented, "In order to make up for Venus' loss, the Venus team issued an additional amount of XVS to themselves, and made up for the less money they made through off-market transactions."

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