Buji DAO Incident: BNB Chain Protocol Venus Suffers Bad Debt Due to Price Information Issue with LUNA

Decentralized community member Bing from Buji DAO stated on Twitter that Venus has encountered issues. By depositing $10,000 worth of LUNA, one could withdraw assets worth $100,000, resulting in bad debts totaling tens of millions of dollars.

Decentralized community Buji DAO member Bing expressed on Twitter that Venus is in trouble. By depositing $10,000 worth of LUNA, one could withdraw other assets worth $100,000, resulting in tens of millions of dollars of bad debt being taken away.

BNB Chain's lending protocol Venus is the second largest Total Value Locked (TVL) protocol on the chain. Bing mentioned that although Venus uses the price feed from the well-known oracle Chainlink, the price of LUNA in the contract has not been updated for over six hours, leading to many failed transactions.

Bing explained that there are defined maximum and minimum prices in the smart contract, but LUNA fell below the contract's minimum price of 0.1 several hours ago and could not be changed. This setting allowed users to borrow other assets in Venus using LUNA at a much higher value than the market price. The incorrect LUNA price information from the oracle caused this issue.

Developer @BoxMrChen responded that the LUNA/USD price feed from Chainlink has been consistently reporting incorrect prices. Chainlink has stated that they have informed various protocols to make corrections upon discovery, but in fact, they also have the capability to prevent external contracts from extracting prices. Venus also did not have real-time monitoring in place for price control.