Venus liquidates additional $30M of notorious lending position

A whitelisted core BNB team address has topped up another $30m to liquidate a notorious position

article-image

Ira Lichi/Shutterstock modified by Blockworks

share

For the second time in a matter of days, liquidators have stepped in to restore the health of a notorious DeFi lending position. 

A whitelisted liquidator address controlled by core Binance Coin (BNB) team members seized $32.6 million worth of BNB on Monday morning from a notorious Venus Protocol lending position in order to liquidate $29 million worth of stablecoins. The position still has $94 million outstanding. 

The position was created in October 2022 following a Binance Smart Chain bridge hack, one of the largest in crypto history. The attacker, believed to be the North Korean-funded Lazarus Group, stole $560 million worth of BNB. 

Unable to sell all of it efficiently, they opted to deposit a major sum into Venus, using the BNB as collateral to take a stablecoin loan of $150 million that was then largely bridged to different chains. 

On lending protocols such as Venus, “liquidators” are often bots that seize collateral to sell and repay a delinquent user’s position if it falls below a certain collateralization rate. Because of the size of Lazarus Group’s BNB position, liquidation could send the price spiraling and put the protocol at risk of bad debt — and the entire ecosystem at risk of cascading liquidations. 

As a result, BNB core team members proposed becoming the sole whitelisted liquidator of the position in November 2022. The team would take on the BNB and refrain from selling it, and instead pay down the debt to prevent systemic risk. 

The team finally had to step in on Friday, using half of a $60 million stablecoin fund deposited into the liquidator address to pay off $30 million in debt across three transactions.

Earlier today, they spent the remainder of the fund and paid off an additional $30 million. 

The position currently remains unhealthy and is poised for another liquidation at a BNB price of $198. While it initially appeared that the liquidator address was out of stablecoins, an additional $30 million in USDT has been added to the address from Binance

In an interview with Blockworks, pseudonymous Venus BD & Community Lead “Danny” said that “BNB Chain will continue to monitor and manage the health of the account as necessary.”

BNB currently sits at $210.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

Research Report Templates.png

Research

An overview of the Base Ecosystem, with a focus on market leaders.

article-image

Although bitcoin hitting $120k by year’s end is looking unlikely

article-image

About 270 million HYPE has been claimed, valued around $7.6 billion

article-image

Stanford professors David Mazières and Dan Boneh will lead the lab alongside a cohort of graduate student researchers

article-image

With more companies holding BTC, bitcoin yielding strategies could become “a new corporate finance norm,” CoinShares posed

article-image

The proposal comes after Polygon governance considered a controversial use of bridged liquidity for yield

article-image

Can the community balance its decentralized ethos with the need for inclusivity and constructive debate?