Venus (XVS) and Pancake Bunny (BUNNY) exploit in flash loan liquidity hack.

May 20, 2021 | Reviews

It has been a dark few days for the market and even darker days for some of the leading Binance Smart Chain projects; Venus Protocol and Pancake Bunny Finance.

Yesterday, a significant amount of XVS, the native token for Venus, was bought on Binance. This amount was large enough to increase the price of XVS by a lot. The XVS was then moved off of Binance and on to Venus Protocol, where it was put as collateral for a BTC borrow of 4200 BTC or $1.5-$1.6 Bn.

Following this, the price of XVS tanked as the pump could not be sustained as the initial pump was only caused by these actors and not the overall market. This liquidated the XVS as it dipped below the liquidation price.

But, this coordinated move allowed the opportunist(s) to do away with their BTC, roughly making a net gain of around $88m…

TLDR: As the price of XVS pumped over 2x from the initial buy, the amount of BTC they could borrow increased. Once, XVS began to dip, this liquidated their position leaving them with an increased amount of BTC.

This isn’t the first time this has happened to Venus protocol and it looks like a long road to recovery for the Filippino based company. Joselito, their CEO also runs Swipe, a payment provider for crypto debit cards and soon to be SwipeSwap. Let’s see how this plays out.

Unfortunately, this isn’t the only exploit we are covering today…

Pancake Bunny Finance, one of Binance’s most valuable builders has also suffered an arguably more serious whale attack.

The team reported this morning that a larger player had borrowed a large amount of BNB from *Pancake Swap*… this is a little confusing as I know fine well, you cannot borrow from Pancake Swap.

Unless this is a typo, I believe they mean Venus Protocol.

I may be a little sceptical, but including the name of the main competitor in your statement without tagging them seems a little off to me…

Anyway, this large amount of borrowed BNB was then used to manipulate the price of BUNNY/BNB and USDT/BNB in favour of the whale attacker.

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This resulted in huge amounts of BUNNY being made which was consequently dumped on the market resulting in a drastic fall in price from roughly $147 to $8 in under an hour.

The hacker then paid back the BNB loan and routed a lot of the funds through Anyswap and 1Inch moving cross-chain to inevitably escape with the funds.

Looking at BSCScan there is a serious amount of tokens being moved around from that wallet.

It is impossible to say how and if Venus and Bunny will recover from this although we would like to wish all their users the best of luck and condolences at this time.

It isn’t anything personal, early adopters take on a risk using these platforms even if the developers do their best to try to prevent these things from happening.

It seems these kinds of attacks are coming at an ever increasingly desperate time for the market as all projects seem to be suffering great losses at this time.

Stay safe out there.

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