Venus says the March 16 exploit in its Thena market created about $2.15 million in bad debt, prompting emergency parameter changes and governance discussions over use of the protocol’s risk fund.
Venus said an exploit in its Thena market on March 16 left the protocol with about $2.15 million in bad debt and contributed to a more than 9% drop in its governance token XVS over 24 hours. According to Venus and PeckShield, the attacker spent months building a position in THE, used 7,400 ETH withdrawn from Tornado Cash to fund the operation, donated more than 36 million THE to the vTHE contract to bypass normal cap checks, and lifted the market’s exchange rate by about 3.8 times. With the inflated collateral value, the attacker borrowed other assets, bought more THE in a thin market, and later sold, driving THE down more than 17% in less than a day and triggering liquidations. Venus estimated the exploiter extracted roughly $3.7 million to $5.8 million in assets including tokenized bitcoin, BNB, and stablecoins. The protocol said Venus Flux was unaffected, losses were largely confined to THE and to a lesser extent CAKE, and no user funds were lost outside the affected pools. In response, Venus paused THE borrows and withdrawals, reduced THE’s collateral factor to zero, tightened rules on other at-risk markets, and said governance will decide whether to cover the loss through its risk fund.