A wallet address flagged by on-chain analysts appears to have extracted approximately $3.7 million from Venus Protocol on BNB Chain (BNB) by depositing THE tokens as collateral to borrow PancakeSwap's CAKE, BTCB, and BNB, blockchain data reviewed by this publication shows.
The position's health rate has since collapsed to 0.30 - far below the 1.0 threshold that triggers liquidation - leaving tens of millions in THE collateral subject to forced unwinding.
The incident follows a pattern of collateral-manipulation exploits seen repeatedly on BNB Chain lending platforms, where low-liquidity tokens are deposited at inflated valuations to extract more liquid assets.
What Happened
According to on-chain data, address 0x1a35…6231 supplied approximately 8.81 million THE tokens worth roughly $2 million to Venus's isolated lending pool, then borrowed against that collateral: approximately 2.46 million CAKE ($3.5 million), 0.001 BTCB, and a small BNB position.
The borrowed value substantially exceeded the collateral's current market value, consistent with either rapid oracle price deterioration post-deposit or deliberate over-borrowing ahead of a price move.
The wallet associated with the address currently holds approximately 1.5 million CAKE ($2.15 million), 20 BTCB ($1.43 million), 200 WBNB ($131,560), and 1.94 BNB - totaling around $3.71 million.
The Venus position, still open at the time of writing, shows a health rate of 0.30, meaning liquidation bots can legally seize the THE collateral to cover outstanding debt.
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Why It Matters
Venus Protocol is one of BNB Chain's largest money markets and has faced similar collateral-manipulation incidents before.
In September 2025, a phishing-linked exploit drained an estimated $13.5 million before Venus intervened through emergency governance, freezing the attacker's collateral and forcing liquidation - a move that recovered funds but drew criticism over the protocol's effective kill switch over user positions.
The current THE position's impending liquidation poses secondary market risk. A forced sale of tens of millions in THE into thin liquidity could suppress the token's price further, creating cascading effects for other THE-collateralized positions across BNB Chain DeFi.
Venus had not issued a public statement on this specific incident at the time of publication.
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