sandmark.com
Venus Protocol, the leading lending platform on the $BNB Chain, has incurred a $2.2mn loss following a flash loan exploit. The attacker targeted THE, the native token of the Thena platform, using its thin liquidity to manipulate price oracles.
According to blockchain data, the exploiter inflated the token price to $0.50 on centralized exchanges before depositing the tokens as collateral on Venus. This manoeuvre allowed the attacker to borrow approximately $5mn in assets, including CAKE, $BNB and Bitcoin (BTC).
The subsequent price collapse of THE to under $0.21 resulted in the automated liquidation of the position, leaving the protocol with $2.2mn of bad debt. In response, Venus has suspended all lending activities for THE and other small-cap tokens to reorganize its risk parameters.
This incident highlights persistent vulnerabilities in onchain lending markets that allow for the collateralization of illiquid assets. According to Lookonchain, the attacker coordinated buy orders across multiple venues to deceive the price oracles and maximize the bad debt impact.