Venus Protocol, a decentralized lending platform operating within the BNB Chain ecosystem, has liquidated a wallet connected to last year’s bridge hack. The protocol liquidated over $30 million in tokens across two transactions.
“Following today’s market movement, the BNB Bridge exploiter account was made healthy as promised by BNB Chain using whitelisted liquidation without any resulting shortfall or further impact to BNB,” the protocol clarified in a statement.
The story traces back to a malicious attack last year when a hacker stole large amounts of cryptocurrency assets on the BNB Chain bridge. The attacker then deposited BNB tokens on the Venus lending protocol to borrow $150 million worth of stablecoins.
The loan position using collateral of 900,000 BNB had remained untouched since the hack until now.
Market impact on loan position
Since last year, the tumbling crypto prices have reduced the health rate of this overcollaterized loan position, bringing it dangerously close to its liquidation point. The Venus team, working with the BNB Chain core team, has carried out manual liquidations to prevent large amounts of BNB from being auto-liquidated and subsequently sold off on the market.
The details of last year’s exploit reveal a calculated manipulation of security proofs by the attacker. The hacker capitalized on a vulnerability related to the “iavl hash check” within the BNB Chain's bridge, and the weakness allowed the attacker to mint 2 million BNB tokens valued at $560 million at the time of the exploit.
Correction: The earlier article incorrectly stated the liquidation amount as $60 million; it was actually half.
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