Key Highlights

  • An attacker exploited thin liquidity in Thena’s THE token to manipulate pricing and borrow more liquid assets from Venus, according to reporting.

  • The incident resulted in roughly $2M in bad debt on Venus after liquidations.

  • Venus said it detected abnormal activity tied to THE and took precautionary steps, including suspending THE borrowing/withdrawals while the investigation continues.

Venus Protocol, a major lending market on BNB Chain, was left with roughly $2 million in bad debt after an attacker manipulated the price of Thena’s THE token to inflate borrowing power and drain more liquid assets, according to reporting.

The exploit was an oracle/price-manipulation loop that relied on THE’s thin on-chain liquidity, allowing the attacker to deposit THE as collateral, borrow assets, and trigger liquidations once the price collapsed. The attacker is estimated to have extracted about $3.7 million in borrowed assets.

Venus acknowledged “abnormal activity” involving THE and stated that, at the time of its updates, the issue appeared limited to the THE and CAKE markets. As a precaution, Venus suspended THE borrowing and withdrawals while it investigates and works through remediation steps.