Issues with Binance Oracle and Venus Protocol
The Venus Protocol, a decentralized money maker on the Binance network, faced critical issues that affected its network, resulting in a drop in BNB sentiment and its corresponding price.
Assessing the Problem
The trouble began when SlowMist’s Team claimed that Venus was at the end of an exploit. The team at Venus soon clarified that there was no problem with its Core Pool or XVS, highlighting the security of the protocol. The issue stemmed from a short-term price discrepancy in the Binance Oracle. This affected a specific isolated pool with BNB. The Binance Oracle team promptly identified and addressed the problem.
Following the @chaos_labs recommendations and out of an abundance of caution due to today’s Binance Oracle price feed issue on the Isolated LST BNB Pool, the snBNB market has been temporarily paused along with 2 other *isolated* markets (agEUR, stkBNB) with similar Binance…
December 10, 2023
The Venus team planned to propose injecting liquidity from the treasury, amounting to around $274K. This was done to support the affected pool while recovering funds with partner assistance.
This incident underscores the importance of continually improving security measures for isolated pools, even though the core pool and other areas were unaffected.
Identifying the Larger Impact
Instances of protocol exploits can raise concerns among users and investors about the overall security and robustness of the Binance Smart Chain ecosystem. However, Binance’s swift response, identification of the issue by the Oracle team, and proposed solutions, including injecting liquidity to the affected pool, may help mitigate negative sentiment.
Not only will the sentiment around the exchange be affected, but BNB might be impacted as well. In fact, Santiment’s data revealed that the weighted sentiment around BNB had fallen. This implied that on the social front, many people have been turning skeptical towards BNB.
However, it wouldn’t just be the Venus incident that could impact the sentiment around BNB. Recent troubles faced by Binance may further add to the cynicism around BNB in the future.
At press time, BNB was trading at $233.91. Its price had depreciated by 2.82% in the last 24 hours on the back of the wider market’s correction.