INTRODUCTION:
Given all the security issues surrounding the DeFi cryptocurrency marketplace, it’s understandable why, on December 10, 2023, word of a faulty pricing oracle that had caused $270,000 in damage to the decentralized finance system Venus spread swiftly over the internet. In the piece that follows, cybersecurity and infotech writer Martin Young draws attention to this problem.
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The DeFi lending and borrowing protocol has confirmed it was affected by a malfunctioning Binance price oracle but confirmed user funds were safe.
Decentralized finance (DeFi) protocol Venus confirmed it was impacted by an issue with one of its price feed oracles, resulting in borrows totaling around $270,000 on Dec. 11.
However, it has downplayed the incident from being an exploit as described by analysts, and it also vowed to replace funds from the treasury.
On Dec. 10, reports emerged that a malfunctioning price oracle had affected the Binance Smart Chain-based decentralized lending and borrowing marketplace.
X (formerly Twitter) user SaulCapital alerted followers that the “isolated pool on Venus Protocol for liquid staked BNB got exploited.”
He posted a link to a suspect wallet address involved in the incident, which held just under $260,000 at the time of writing.
However, Venus Protocol ambassador NoOneVII responded, stating that it appeared to be an “Oracle price issue, occurring in a small Isolated Market.”
“Venus Core Pool and other Pools are completely separate from each other and are not affected by this,” he said, adding on the Venus Protocol Telegram channel that there was no problem with security.
Head of Venus Labs, Brad, also confirmed that the Binance oracle, which supports the snBNB asset in the isolated pool, “reported a wrong price resulting in about $200,000 of borrows.”
On Dec. 11, Venus Protocol said it would share more details shortly, assuring that “The $snBNB price feed is back to normal, Core Pool and other markets are unaffected. Funds are SAFU.
The total value locked on the DeFi protocol, which launched in 2020, doesn’t appear affected by the incident and was $738 million at the time of writing, according to DefiLlama.
The platform’s native token, Venus (XVS), has fallen 17.5% over the past 24 hours to $9.56 at the time of writing, though much of the dip has coincided with a broader sell-off in the cryptocurrency market.
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