300,000 BNB have been liquidated. How much selling pressure will the hacked account cause?
Original |
Author | Qin Xiaofeng
In the past few days, as the BNB cross-chain bridge hacker Venus account positions began to be liquidated, external network encryption KOLs began to focus on discussing the future trend of BNB. Pessimists believe that BNB may repeat the same mistakes and collapse like FTT, and some even compare the historical trends of the two in a decent way, causing panic in the community. As follows:
(KOL compares BNB to FTT prices)
The question is, how much selling pressure will the recent liquidation of BNB cause on the market? Let’s talk about the conclusion first.There is no major impact, all BNB position liquidation on Venus will be taken over by the BNB Chain team, and will not be thrown to the market, let alone large-scale serial liquidation.
The cause of the incident started in October last year, when a hacker used a vulnerability in the BNB cross-chain bridge BSC Token Hub to steal about 2 million BNBs - the price of BNB was $280 at the time, with a total value of about $560 million. Then, the hacker deposited 924,821 BNB into the lending agreement Venus, lent about 152 million US dollars of stable coins (including 116 million USDT and 36 million USDC) and transferred them to other chains.
After the accident, BNB Chain immediately released a new version of BSC v1.1.15, which can prevent activities related to hacker accounts. At the same time, the BNB Chain node program prevents the flow of stolen funds and potential attacks through blacklist and suspension functions. To put it simply, the hacker’s wallet address assets (the remaining 1.02 million BNB and other stable currency assets in the wallet) are restricted from transferring—to some extent, the wallet assets have been permanently frozen, and the hacker has only stolen more than 900,000 BNB.
(hacker wallet address asset)
At this time, the only headache for all parties is how to deal with the BNB assets that have been used as collateral in Venus? The direct recovery and destruction at zero cost means that Venus will have a huge deficit of 150 million US dollars, and Venus depositors obviously do not agree; if the Venus protocol is allowed to operate on its own, and the liquidation price is reached, it will be automatically thrown to the market, and a huge amount of BNB will lead to serial liquidations It is also not in the interests of Binance to further suppress the price of BNB.
(BNB Chain community proposal)
In the end, Binance decided to bear the loss and put forward a proposal called VIP-79 in the Venus community and it was passed. The specific content is: a whitelist address controlled by the BNB Chain core team serves as the sole liquidator of the position to safely control this ultra-large scale BNB supply, avoiding the direct occurrence of serial liquidation. Moreover, Binance promised that the liquidated BNB will not be thrown into the market, but will be destroyed after being recovered.
At that time, the BNB position liquidation price of the Venus hacker address was about 220 USDT, and the BNB spot price was once close to this point. BNB Chain then transferred 30 million USDT to the whitelist address as backup liquidation funds to prevent the impact of short-term price collapse. Interestingly, the price of BNB began to rise in the following weeks, once touching 400 USDT, and getting further and further away from the liquidation threshold. Discussions about BNB liquidation and selling pressure gradually decreased.
Until June 12 this year, the price of BNB continued to decline and once again approached the liquidation line of US$220, attracting the attention of the crypto community. BNB Chain also immediately replenished US$30 million in stable coins to meet the challenge. This time, BNB price still held firm around $220 and started to rebound, again avoiding liquidation.
It was not until August 18, with the sharp correction in BTC prices and BNB prices finally breaking through $220, that the BNB positions in the Venus hacker address began to be liquidated (the health coefficient was below 1). Data on the chain shows that on August 18, a total of 6.7431 million vBNB (Venus BNB) were liquidated, and the BNB Chain address paid a total of more than 30 million US dollars to recover approximately 140,000 BNB. At this time, the liquidation price of BNB dropped to around $211, and there were 784,615 BNB remaining in the hackers address. As follows:
On the evening of August 21, the price of BNB fell below US$211, triggering liquidation again. A total of approximately US$6.88 million in vBNB was liquidated, and the BNB Chain address once again paid more than US$3,000 to recover approximately 156,200 BNB. As follows:
As of now, there are 628,337 BNB left in the hackers account position, and the health coefficient of the Venus account has returned to 1.07; according to estimates, the next round of liquidation price is about $199—the current BNB price is $213, which needs to drop by 6.5%. The account borrowed about $94.21 million, and the debt-to-collateral break-even point was about $150; in other words, as long as BNB remained above this price, Venus would have no financial losses.
(Venus hacker account)
Overall, in the past few days, BNB Chain paid a total of 60 million US dollars to recover 296,400 BNB, and the impact on the market was relatively small. The BNB price fell from a minimum of 220 US dollars to 203 US dollars, a maximum drop of 7.7%; the current BNB price Compared with 220 US dollars on the 18th, it fell only 3.1%, and the price of BTC was 2.3% in the same period.
However, under the agitation of people with good intentions, BNB seems to have become the twilight of the end, or even the second FTT. In fact, the situation Binance is facing this time is not at the same level as FTX: FTX misappropriated assets, causing a gap of tens of billions of dollars, while Binance is only liquidating $150 million in hacker debts, and the entire process is transparent and open.
“I don’t understand why people are worried about this little $180 million liquidation. BNB is not some random garbage with 0 liquidity, Binance can handle this easily, they have handled bigger things in the past. I can understand Venus facing risk, but I think Binance can easily handle the liquidation of nearly $200 million or even destroy these tokens. Co-founder of cryptocurrency investment platform ZignalyAbdul Rafaycommented.
