Starting in June 2025, the attacker quietly accumulated approximately 84% of Venus’s THE supply cap (14.5 million tokens) over nine months. With virtually no market depth to absorb the sell-off, THE collapsed to $0.24, below its pre-attack level. On the evening of March 15, Venus Protocol, the largest lending platform on BNB Chain, was struck by a price manipulation attack targeting Thena’s low-liquidity native token THE.
Venus absorbed $2.15 million in bad debt and froze THE-related markets pending investigation. As competition intensifies, liquidity is being spread thinner across an ever-growing number of venues. The attacker manipulated THE’s price using low liquidity, inflating its value via repeated oracle updates and exploiting the protocol’s inability to absorb large liquidations.
A key takeaway for DeFi protocols is that fragmented and shallow liquidity across the sector increases vulnerability to price manipulation and execution losses, potentially elevating systemic risk. A known donation attack vector was flagged in Venus’s Code4rena audit, but the team dismissed it as harmless, leaving the protocol exposed to this exact exploit. The Venus exploit did not occur in isolation, illustrating the fragility of DeFi liquidity across platforms.
Leave a Reply