Venus Releases Preliminary Analysis of Exploit and Lowers Collateral Factors for 7 Markets to 0

BlockBeats News, March 16th, Venus Protocol released THE Fund Pool Exceptional Activity Update following the incident. In addition to the previous suspension of THE borrowing and withdrawal, the Collateral Factor (CF) of 7 markets has now been reduced to 0 as a precautionary measure against a single user holding an excessively high collateral ratio in the market. The 7 markets are BCH, LTC, UNI, AAVE, FIL, TWT, and lisUSD. All other markets remain unaffected and continue to operate normally.

The preliminary assessment of the attack method indicates that the attacker started accumulating THE tokens slowly through normal deposit processes since June 2025, eventually holding 84% of the total supply (approximately 12.2 million THE). Yesterday, the hacker directly transferred THE tokens to the protocol contract, instantly boosting the supply and creating a huge amount of collateral. The attacker then engaged in recursive price manipulation, exploiting the protocol's low on-chain liquidity combined with TWAP oracle delay. The hacker initiated a loop: deposit THE, borrow other assets, use the borrowed assets to buy more THE on-chain, wait for the TWAP oracle update to raise the price.

Venus stated that they are always committed to transparency and will release a full report after the investigation is concluded.