Overview of Crypto Liquidations
According to Coinglass, the cryptocurrency market observed liquidations surpassing $1.04 billion during the given period. Among these, a noteworthy incident involved the liquidation of a BNB position on the Venus lending protocol, connected to the perpetrator of the BSC Bridge’s $560 million hack.
The BSC Bridge Hack: Unveiling a Monumental Crypto Exploit
The BSC Bridge hack that transpired in October 2022 stands out as one of the most significant exploits in the history of cryptocurrency and decentralized finance (DeFi). The hacker managed to pilfer almost $593 million in BNB. However, the narrative didn’t conclude there, as the hacker attempted to launder the stolen funds.
Following the breach, the hacker deposited 900,000 BNB, equivalent to $200 million, as collateral on the Venus platform to secure a loan of $150 million worth of stablecoins. The Venus protocol, boasting over $598.25 million in Total Value Locked (TVL), claims the status of the second-largest DeFi protocol on the Binance Smart Chain.
Notably, DeFi researcher Ignas pointed out that this position represented the “single largest potential liquidation in all of DeFi that cannot be closed.” This stems from the fact that the BNB Chain was frozen and the network underwent an upgrade post-exploit, potentially jeopardizing the ecosystem due to the risk of precipitous BNB price declines.
Consequently, the Venus DAO decided to authorize BNB Chain as the sole liquidator for the hacker’s address, to be activated in the event of a margin call. It is crucial to highlight that a drop in the BNB price to $220 would trigger the liquidation of the hacker’s collateral.
Liquidation and Its Impact
With the token experiencing recent selling pressure, the project’s team made the decision to manually liquidate the position to mitigate the potential repercussions of a margin call on the broader BSC ecosystem.
On-chain data provided by PeckShieldAlert reveals that the position has been liquidated, resulting in 5.6 million BNB tokens being sold off, valued at $52.3 million—a fraction of the total position.
Assessing BNB’s Current Status
Subsequent to these developments, the value of BNB has slipped below the $220 mark. At present, the cryptocurrency is trading at $215.00, denoting a decrease of 10.76% over the past week.
Although BNB has encountered challenges related to its price in recent months, primarily linked to the ongoing SEC lawsuit against Binance.US, the token exhibits resilience beyond expectations.
Currently, BNB boasts a market capitalization of $33 billion, solidifying its position as the fourth-largest cryptocurrency by market capitalization.
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