Venus Protocol Releases THE Pool Attack Analysis, Collateral Factor Reduced to 0 for 7 Markets

Gate News, March 15 — Venus Protocol announced the latest developments following the abnormal activity in the THE liquidity pool. On March 16, in addition to suspending THE borrowing and withdrawals, the platform reduced the collateral factors (CF) to 0 for seven markets, including BCH, LTC, UNI, AAVE, FIL, TWT, and lisUSD. This precautionary measure targets markets where a single user holds an excessively high proportion of collateral. All other markets remain unaffected and continue normal operations.

Regarding the attack method, initial assessments indicate that the attacker began accumulating THE tokens through normal deposit processes starting June 2025, gradually reaching the maximum holding limit of approximately 12.2 million THE, or 84%. Yesterday, the hacker directly transferred THE tokens into the protocol contract, instantly increasing the supply, creating a large amount of collateral, and executing recursive price manipulation cycles. By exploiting the low on-chain THE liquidity combined with TWAP oracle delays, the hacker initiated a cycle: depositing THE, borrowing other assets, using borrowed assets to buy more THE on-chain, waiting for the TWAP oracle to update and push the price higher.

Venus Protocol states that it remains committed to transparency and will release a full report after the investigation is complete.