Andrew Thurman

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



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 <a href="https://debank.com/profile/0x489a8756c18c0b8b24ec2a2b9ff3d4d447f79bec">position</a> 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.&nbsp;



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 <a href="https://community.venus.io/t/bnb-chain-core-team-as-the-sole-liquidator-of-the-bnb-exploiter-address/3202">liquidator</a> 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. 



<a href="https://blockworks.co/news/bsc-venus-protocol">The team finally had to step in on Friday</a>, 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.&nbsp;



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 <a href="https://blockworks.co/tag/binance">Binance</a>. 



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



<a href="https://blockworks.co/price/bnb">BNB</a> currently sits at $210.



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Venus liquidates additional $30M of notorious lending position

Sebastian Sinclair

XRP has flipped Binance’s BNB for the first time in over two years, jumping into fourth spot in crypto market cap rankings behind tether (<a href="https://blockworks.co/price/usdt" target="_blank" rel="noreferrer noopener">USDT</a>), ether (<a href="https://blockworks.co/price/eth" target="_blank" rel="noreferrer noopener">ETH</a>) and bitcoin (<a href="https://blockworks.co/price/btc" target="_blank" rel="noreferrer noopener">BTC</a>).



BNB was worth double <a href="https://blockworks.co/price/xrp" target="_blank" rel="noreferrer noopener">XRP</a> at the beginning of the year — $44 billion to $17.4 billion. Despite coming under repeated fire from regulators globally, Binance’s flagship token had, throughout all of 2022 and 2023, held its ground.



All that changed when the markets digested a New York <a href="https://blockworks.co/news/judge-rules-ripple-xrp-not-security" target="_blank" rel="noreferrer noopener">judge’s ruling</a> that XRP sales were not securities through secondary markets (crypto exchanges and the like).&nbsp;



BNB now commands a $40.1 billion valuation, 4.7% shy of XRP’s $42 billion, per CoinGecko.



The judge also ruled institutional sales may well be securities, leaving room for further clarity as the case moves on.



Derivatives markets immediately went into overdrive, <a href="https://blockworks.co/news/traders-enter-leveraged-positions" target="_blank" rel="noreferrer noopener">swelling open interest</a> for XRP futures by 99%. The figure currently stands at $1.02 billion in outstanding contracts, Coinglass <a href="https://www.coinglass.com/BitcoinOpenInterest" target="_blank" rel="noreferrer noopener">shows</a>.



XRP was last seen trading at $0.79, up more than double from its previous daily closing price of $0.47. The last time XRP’s market cap was higher than BNB’s was in April 2021 (briefly, for one day), after it was flipped for the first time two months earlier.



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Regulatory pressure against global crypto exchange Binance has brought BNB considerable sell-side activity. BNB is up about 5% year to date compared with BTC’s 70%. XRP has now gained more than 130% this year.



All while Ripple has been embroiled in a three-year-long legal battle with the SEC over whether it — along with executives Brad Garlinghouse and Christian Larsen — illegally offered securities in the form of XRP.



Thursday’s ruling has shed some light on the situation, with Coinbase and Kraken <a href="https://blockworks.co/news/coinbase-will-relist-xrp-following-ripple-summary-judgement" target="_blank" rel="noreferrer noopener">quickly pledging to relist</a> XRP after dropping it in light of the SEC’s case.&nbsp;



Still, some legal <a href="https://prestonbyrne.com/2023/07/13/ripple-labs-ruling-throws-u-s-crypto-token-regulation-into-disarray/">experts have warned</a> the ruling is far from definitive.&nbsp;



Updated Jul. 14, 2023 at 2:00 am ET: Open interest amounts. 



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XRP flips BNB for first time in 2 years after court ruling

David Canellis

Binance Coin (<a href="https://blockworks.co/price/bnb" target="_blank" rel="noreferrer noopener">BNB</a>) is back in the top four cryptocurrencies by market value after flipping popular stablecoin USDC this week.



BNB has jumped 13% so far in 2023 to boost its capitalization to nearly $45.5 billion, its highest point in one month.&nbsp;



<a href="https://blockworks.co/price/usdc" target="_blank" rel="noreferrer noopener">USDC</a>, on the other hand, now boasts $43.8 billion in circulating supply, around $800 million below its capitalization at the start of the year, giving room for BNB to advance on its leaderboard position during its recent rally.



All this while <a href="https://blockworks.co/news/stablecoin-dominance-retreats-from-high" target="_blank" rel="noreferrer noopener">stablecoin dominance retreats</a>. Stablecoins altogether made up almost 19% of the entire crypto market in early November, a record high set as FTX imploded. That figure is now down to 16%, per The TIE, a 14 percentage point drop. 



Broad stroke analysis would suggest traders flocked to dollar-pegged assets like USDC, tether (<a href="https://blockworks.co/price/usdt" target="_blank" rel="noreferrer noopener">USDT</a>) and Binance’s own branded offering, <a href="https://blockworks.co/price/busd" target="_blank" rel="noreferrer noopener">BUSD</a>, as markets turned sour last quarter. 



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<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" src="https://flo.uri.sh/visualisation/12410784/embed#?secret=jgr69XioOn" data-secret="jgr69XioOn" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Stablecoin dominance and crypto&#8217;s total market cap are inversely correlated, as one might expect.</figcaption></figure>



Now that markets seem eager for a recovery rally, they’ve since piled back into other tokens — boosting prices and market caps while diminishing stablecoin dominance. 



Crypto has added 8% to its collective capitalization so far this year, representing $65 billion in gains. 



Circle <a href="https://www.circle.com/en/usdc#transparency" target="_blank" rel="noreferrer noopener">says</a> that between Dec. 29 and Jan. 5, the firm redeemed $4.2 billion in USDC for cash while issuing $3.6 billion in fresh tokens, putting its redeem-to-issuance ratio at 7:6.



BNB’s resilience is noteworthy <a href="https://blockworks.co/news/fud-or-fact-binance-rumors-analyzed" target="_blank" rel="noreferrer noopener">considering the noise</a> surrounding Binance’s reserves, regulatory strife and <a href="https://www.bloomberg.com/news/articles/2023-01-10/binance-bnb-acknowledges-past-flaws-in-managing-busd-peg-stablecoin-reserves" target="_blank" rel="noreferrer noopener">BUSD’s backing</a>. 



But Binance itself finished the year with 80% market share relative to 11 competitors, <a href="https://blockworks.co/news/binance-market-share-bounces-back-bnb-price-consolidating" target="_blank" rel="noreferrer noopener">according to Kaiko</a>, gaining ground in the wake of FTX’s demise.



<h3 class="wp-block-heading">BNB aside, Ether rally could really boost crypto markets</h3>



Still, other top cryptocurrencies are doing very well this year. Bitcoin (<a href="https://blockworks.co/price/btc" target="_blank" rel="noreferrer noopener">BTC</a>) and ether (<a href="https://blockworks.co/price/eth" target="_blank" rel="noreferrer noopener">ETH</a>) were up 5.5% and 12% year to date, respectively as of 7:00 am, ET. Polygon (<a href="https://blockworks.co/price/matic" target="_blank" rel="noreferrer noopener">MATIC</a>) and polkadot (<a href="https://blockworks.co/price/dot" target="_blank" rel="noreferrer noopener">DOT</a>) have both posted close to 14% returns.



Analysts are watching ether closely, however. Research unit BitOoda recently highlighted ETH’s outperformance relative to bitcoin, noting that any potential bull run in bitcoin “will doubly impact ETH if this out-performance continues.”



“ETH breakout is a good leading indicator for crypto bullishness and could signal a bull run in the next two weeks,” BitOoda said.



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</div><figcaption class="wp-element-caption">Jan. 11 figures as of 7:00 am, ET</figcaption></figure>



Solana (<a href="https://blockworks.co/price/sol" target="_blank" rel="noreferrer noopener">SOL</a>) is also attempting a recovery. SOL shed up to 75% of its value after the FTX drama broke in November, but has since risen 60% in 2023.



Other Layer-1 blockchains from market cycles past are also doing well, with dogecoin (DOGE) adding more than 9% as its <a href="https://blockworks.co/news/litecoin-dogecoin-see-mining-surge" target="_blank" rel="noreferrer noopener">hashrate sits at record highs</a>. 



Cardano (<a href="https://blockworks.co/price/ada" target="_blank" rel="noreferrer noopener">ADA</a>) meanwhile surged more than 28% to flip DOGE earlier this week.



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BNB Flips USDC, Cardano Flips Dogecoin With Crypto Relief Rally

The native token of crypto exchange Binance — Binance Coin (BNB) — has set a fresh all-time high against bitcoin since word of Binance’s unexpected FTX buyout broke on Tuesday.&nbsp;



BNB hit 0.0197 BTC ($390.75) per token this afternoon, breaking its previous bitcoin (BTC) price record — set less than a week ago on Nov. 4 — by more than 14%. 



The token serves as the native asset for Binance, awarding holders discounts on trading fees alongside exposure to regular token burns, which reduce overall supply. FTX, like other prominent exchanges, has its own in-house digital asset, FTT, which has sunk 60% against the dollar over the past day.



BNB is still 45% below its peak in terms of raw US dollars. The token traded as high as $686.31 last May, per CoinGecko, which means it would need to rise more than 86% from here.&nbsp;



Still, its surging price reflects that markets consider BNB a thermometer for the overall health of Binance. Against the dollar, BNB is up around 10% over the past day, as of 12:30 pm ET — FTX’s FTT is down more than 27% over the same period.



<figure class="wp-block-embed aligncenter is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" src="https://flo.uri.sh/visualisation/11747191/embed#?secret=vzFe0GWbLS" data-secret="vzFe0GWbLS" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption>BNB has since retraced but this chart shows its new price record</figcaption></figure>



Earlier today, Binance CEO Changpeng &#8216;CZ&#8217; Zhao tweeted details of a deal that would see his crypto exchange totally acquire one of its primary rivals in FTX. The acquisition is pending due diligence and terms agreement, and it’s unclear whether regulatory hurdles could come into play — especially pending the <a href="https://cms.blockworks.co/binance-buying-ftx-news-enough-to-pull-crypto-back/" target="_blank" rel="noreferrer noopener">outcome of the US midterm elections</a>.



The platform had been dogged by insolvency rumors ever since the balance sheet of its sister organization Alameda Research — a proprietary trading and venture capital firm also owned by FTX CEO Sam Bankman-Fried — were <a href="https://www.coindesk.com/business/2022/11/02/divisions-in-sam-bankman-frieds-crypto-empire-blur-on-his-trading-titan-alamedas-balance-sheet/" target="_blank" rel="noreferrer noopener">reported by CoinDesk</a> last week.&nbsp;



The sheet showed outsized exposure to FTT and other tokens close to Bankman-Fried, <a href="https://cms.blockworks.co/binance-ceo-goes-full-fud-in-attempt-to-bury-ftx/" target="_blank" rel="noreferrer noopener">culminating in Zhao</a> pledging to offload hundreds of millions of dollars worth of the token to reduce its market risk. Alameda CEO Caroline Ellison pushed back on aspects of the reporting, saying the accounting didn’t reflect offsetting hedges the company had in place.&nbsp;



Of the top 10 cryptocurrencies by market capitalization, excluding stablecoins, BNB is now the best performing asset against bitcoin for the year to date — by far. It’s up 69% against BTC while second-best XRP has only risen 23%.&nbsp;



Ether, on the other hand, has lost 4% of its value against bitcoin so far in 2022 and cardano has shed 29%. Solana, while now outside of the top 10 digital assets, has collapsed a whopping 62% against bitcoin over the same period.



BNB is still down 35% against the dollar this year, echoing performance right across the digital asset market. Bitcoin over the same period has lost more than half of its value.



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