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Venus Protocol, a prominent DeFi borrowing and lending platform, has recently encountered suspicious activity regarding the $THE pool. In this respect, there is a possibility of a Flash Loan attack, raising concerns across the DeFi community. As per the official X post of Venus Protocol, only the $CAKE and $THE markets seem to be impacted at the current stage. Hence, amid the ongoing investigation, the early indications point toward a likely link to a refined exploit dealing with illiquid collateral.
🚨 We have identified unusual activity involving the $THE pool and are actively investigating.
— Venus Protocol (@VenusProtocol) March 15, 2026
At this time, only the $THE and $CAKE markets appear to be affected.
We will share updates as our investigation progresses. We appreciate your patience and support. 💙
Due to this unusual situation, Venus Protocol has paused all borrows and withdrawals of $THE.
🔒 Follow-up Update
— Venus Protocol (@VenusProtocol) March 15, 2026
As we continue to investigate the unusual activity in the $THE pool, we are taking precautionary action by pausing all $THE borrows and withdrawals effective immediately, to prevent any further misuse.
This will remain in effect until the investigation is…
Venus Protocol Faces Concerns of Flash Loan Exploit as Attacker Targets $THE and $CAKE Pools
The announcement from Venus Protocol reveals that the platform is conducting an investigation into the abnormal activity dealing with the $THE pool. Specifically, the malicious actor utilizes $THE tokens in the form of collateral for the borrowing of diverse assets. The respective assets included $BNB, $BTCB, and $CAKE. This enabled manipulation of the market prices while it could also lead to large-scale liquidations.
Keeping this in view, the community is speculating on the exploitation of a staggering 42M $THE liquidation. This figure reportedly accounts for a total value of $14M. The blockchain onlookers pointed out that the attacker may have manipulated the low-liquidity conditions while dealing with the $THE pool for artificial price inflation.
Collateral-Based Manipulation Triggers Questions over DeFi Security
Such a manipulation is a vulnerability in diverse DeFi networks that depend mostly on collateral lending. The investigation of Venus Protocol aims to identify whether the incident happened due to an outside market manipulation or a protocol-level weakness. If the attacker successfully executes the malicious strategy of $THE accumulation and further sale at a high price level, it could cost an estimated $14M to Venus Protocol. Hence, while the platform has disclosed the expectation of damage to the $CAKE and $THE markets, the community is growing more and more cautious while further details are to be provided amid ongoing investigation.