Decentralized protocol Venus also received a domino effect created through a collapse in LUNA token price, as the platform announced that the price contrast on the platform resulted in a multi-million dollar loss.
The protocol lost around $11.2 million after Chainlink oracle stopped the data feeding for LUNA.
As per the report, the problems occurred after the Chainlink oracles suspended the price feed for the LUNA token due to a disastrous crash in the coin.
The protocol stated that the LUNA price on Venus was indicating $0.107 while actual its market price was $0.01. “In order to de-risk this situation, the protocol was paused using PauseGuardian via multisig,” it stated.
In the investigation, Venus identifies two large deposits of LUNA at the itinerant price, which were used for borrowing assets.
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“Upon this desyncing event, it was discovered that 2 accounts had suspiciously deposited a sum of 230,000,000 LUNA valued at over $24,000,000. Assets were borrowed totaling around $13,500,000.”
After facing a huge loss, Venus has shut down the protocol and revealed the “risk fund”, which will be used to remedy the shortfall resulting from the incident.
To restore the operation, a proposal has been launched that will commence operation again in the next 48 hours. All liquidity is contained in the protocol as it is and no liquidations will take place during this period.
Venus is the second-largest protocol built on the Binance Chain that contains approximately $1 billion in total value locked. After the incident came to the forefront, its TVL plunged by 28% in the last 24 hours. To prevent the worst scenario of liquidation, the platform has suspended withdrawals.
