After more than a year of the attack, BNB Chain Core has officially proposed a comprehensive plan to seize the collateral of the BNB Bridge operator and use the funds to repay outstanding debts without resorting to market liquidation of BNB.
The proposal outlined a detailed implementation strategy to limit potential losses for the Venus Protocol. The report notes that the operator’s balance as of December 11, 2023 includes an offer of 630,240 BNB. In addition, it has loans worth 58,440,000 USDT and 37,440,000 USDC.
According to the information in the proposal, the outstanding debt must first be settled to unlock the BNB offering. As a result, the proposal proposes to use the mechanism of forced liquidation by granting BNB Chain the authority to carry out the necessary operations.
BNBChainCore published a proposal on the Venus forum that aims to give BNB Chain the discretion to seize the BNB Bridge operator’s collateral and repay its debts, while avoiding any market liquidation of BNB. https://t.co/yC4RaLpKlx
— Wu Blockchain (@WuBlockchain) December 16, 2023
Specifically, BNB Chain Core outlined five steps for executing the processes. The first is to enable forced liquidation for the exploiter’s position. Notably, this will liquidate 100% of his USDT and USDC positions. The remaining BNB will then be seized after the liquidation.
It was also stated that the exploiter had collected 128,666.39 XVS tokens in emissions. At the same time, the proposal stated that the XVS token assigned to the account would be claimed, seized and sent to Venus’ treasury.
In addition, the protocol liquidation fees generated during the process will be refunded. In addition, if the remaining amount after settlement of the exploiter’s debts is sufficient, it will be used to cover any shortfalls. However, if the remaining amount is insufficient to cover the total shortfall, Venus will use the risk fund.
This exploit relates to the October 2022 security breach. It led to a temporary pause of the BNB Smart Chain (BSC), with the exporter generating $566 million worth of BNB, while only $137 million was successfully moved to other chains. The perpetrator used Venus and used 900,000 BNB as collateral to secure loans in various stablecoins, including USDT and USDC.
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