Venus Protocol Hack
What happened
During the LUNA collapse, Venus Protocol continued valuing LUNA collateral at a paused Chainlink feed price of about $0.107 while the market price had fallen near $0.01. Suspicious accounts deposited cheap LUNA and borrowed against the overstated collateral value, creating a reported loss of approximately $11.2 million. This was an oracle-price desynchronization and bad-debt incident, not a conventional smart-contract code exploit.
The lending market lacked a sufficient stale-feed safety stop. A suspended price feed remained usable for collateral valuation despite an extreme divergence from the spot market, enabling borrowing against materially overstated LUNA collateral.
How it happened
Chainlink's LUNA/USD feed hit its floor threshold and stopped updating. Venus's LUNA market remained open, so accounts could deposit large quantities of now-cheap LUNA while the protocol still priced it at the frozen higher value. They borrowed other assets against the inflated collateral value, producing bad debt once the market price was recognized.
Venus paused the protocol, set LUNA and UST oracle values to zero, and moved to offboard the affected markets. Its Risk Fund was designated to cover the resulting shortfall.
Protocol details
Evidence
- report @VenusProtocol incident report twitter.com
- report Venus Protocol Official Statement regarding LUNA medium.com
- report Venus LUNA Incident Update 3: Resuming the Protocol medium.com
- analysis DeFiLlama defillama.com
- analysis Venus Protocol LUNA Incident Update 2 community.venus.io
- analysis The LUNA Price Dip Exploits halborn.com
- analysis LUNA Collapse Leads to Venus Protocol Exploit therecord.media
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