Breaking: $200 Million in BNB Faces Potential Liquidation Risk!
As BNB’s price continues to decline, the community is increasingly concerned about the looming risk of a major $200 million loan facing potential liquidation.
Breaking: $200 Million in BNB Faces Potential Liquidation Risk!
Update as of June 12:
BNB Chain announced on June 12, 2023 (Vietnam time) that the team will cover the full value of the loan on Venus.
According to the governance proposal below, the BNB Chain core will take over the $BNB position on Venus if the BNB price hits the liquidation threshold. https://t.co/MSUHLUTwTS
— BNB Chain (@BNBCHAIN) June 12, 2023
This means that if the loan position is liquidated, BNB Chain will cover the entire amount, preventing the BNB from being sold on the market.
Meanwhile, BNB’s price briefly touched $220.40, coming dangerously close to the liquidation threshold but has since rebounded to $228 at the time of this update.
1-hour Chart of BNB/USDT on Binance as of 03:50 PM, June 12, 2023
Original Article:
As reported by Coin68, Binance’s native token, BNB, is experiencing a steep decline. This is partly due to the SEC labeling it as a security and partly due to Binance’s recent legal troubles with U.S. authorities.
However, BNB is also facing another significant risk from an impending loan liquidation.
1/2 Venus Protocol experienced NO EXPLOIT and funds are SAFE! The possible BNB threat actor has used the Venus platform to open an overcollateralized position of app. $254M and borrow app. $147.5M against 900K BNB Tokens deposited. https://t.co/wl4qtaXDl7
— Venus Protocol (@VenusProtocol) October 6, 2022
Looking back to October 2022, when BNB Chain’s bridge was attacked, hackers stole 2 million BNB and attempted to launder the funds across multiple chains.
Among the stolen BNB, hackers staked 920,000 BNB on the Venus lending protocol on BSC to borrow $150 million in stablecoins. Venus has since announced this loan:
Since then, the BNB remains locked on Venus because the BNB price has not reached the liquidation threshold. However, the loan has now become a “ticking time bomb.”
According to DefiLlama, this loan will be liquidated if BNB’s price drops to approximately $219.32, which would result in $200 million worth of BNB being sold on the market.
Source: DefiLlama
At the time of reporting, BNB is trading around $235 and briefly hit a low of $228. This means it’s just a few price steps away from the liquidation threshold.
1-hour Chart of BNB/USDT on Binance as of 02:20 PM, June 10, 2023
If $200 million worth of BNB were to flood the market, it would drive the token price even lower, potentially causing a cascading effect and creating panic within the community.
The good news: Venus DAO has voted to whitelist BNB Chain as the sole liquidator of the BNB exploiter address.
— Ignas | DeFi (@DefiIgnas) February 23, 2023
So, the liquidation is painful, but wouldn't be deadly. pic.twitter.com/rCFP3Kgr0i
The Venus community has proposed allowing the BNB Chain team to liquidate the loan early. This means initiating the liquidation before BNB hits the threshold, aiming to alleviate market pressure.
