Tense situation on BNBChain. Launched in September 2020, BNBChain is an EVM blockchain launched by behemoth Binance. October 2022, the BNBChain bridge was attacked and millions of dollars stolen. Since then, the situation surrounding the BNB token has been extremely tense. A recent fall in the token’s price prompted the BNBChain teams to take action.
A look back at the BNBChain bridge hack
On October 7, 2022, the entire ecosystem held its breath after the hack of the BSC Token Hub bridge. In practice, more than two million BNB were stolen for a total amount of several million dollars.
Subsequently, the hacker used 900,000 BNB to borrow around $150 million in USDT and USDC stablecoins.
Obviously, the BNBChain and Venus teams quickly realized that this position could pose major problems in the event of liquidation.
« As the market is very volatile, there is a risk of liquidation. If this happens, the position could cause a cascading effect and unnecessary damage to the market, as well as increased risk for the Venus project, the BNB token and the BNB chain. »
As a result, on November 22, the developers of BNBChain submitted a proposal via the Venus protocol governance module.
« The objective of this proposal is to introduce a whitelisting capability to perform liquidations, specifically targeting the liquidation of the BNB bridge operator’s position on Venus. »
In other words, this proposal aims to make the BNBChain team the sole possible liquidator for the hacker’s position.
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30 million liquidated on hacker’s position
Last week, the Bitcoin price suddenly fell back to levels close to $25,000. Naturally, this fall took the entire crypto market with it, including BNB. Thus, the BNB fell by around 12%, from over $240 to around $210.
Following this fall, the hacker’s position found itself in a situation close to liquidation. Such a liquidation would have extremely detrimental effects on the ecosystem and could lead to serial liquidations, resulting in further declines in the BNB token.
Thus, on August 21, the hacker’s position was liquidated by BNBChain teams. A total of 6.89 million vBNB tokens were liquidated. For its part, the liquidator repaid 30 million USDT.
From now on, the position The hacker’s portfolio consists of 628,245 BNBs collateralized to borrow nearly $90 million.
Following liquidation, the health factor of the position has returned to 1.05. As a reminder, this health factor is used to measure the health of a loan. If it falls below 1, the loan must be liquidated.
This does not mean that BNBChain is out of business. Nevertheless, the liquidation process carried out by the network teams seems to have prevented a cascade of liquidations.
During BTC’s recent fall, the crypto markets recorded one of the worst days in its history. Indeed, more than a billion dollars were liquidated on the markets in the space of 24 hours.
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