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- BNB Chain proposes to prevent BNB coin liquidation, which could stabilize its price and market.
- The proposal addresses an exploiter’s debt issue, aiming to use its funds to reduce debts and boost Venus Protocol stability.
BNBChainCore has introduced a groundbreaking proposal on the Venus forum, aiming to address a significant challenge faced by the BNB Chain community. Under the heading “BNB Bridge Exploiter Account Remediation,” the proposal lays forth a comprehensive plan to address the harm caused by a well-known exploiter.
The proposal’s primary goal is to give BNBChain the power to seize the exploiter of the BNB Bridge’s collateral, a whopping 630,240.00 BNB. This sizeable amount is essential to settle the outstanding debts of 58,440,000 USDT and 37,440,000 USDC and avoid the need for a market-wide liquidation of BNB.
Forced Liquidation Mechanism in Action
The plan calls for the establishment of a forced liquidation mechanism to handle this difficult circumstance. BNBChain would compel the liquidation of the exploiter’s position through this process, followed by seizing the remaining BNB assets. This establishes a clear route to paying off the exploiter’s debts and resolving potential vulnerabilities in the Venus Protocol.
The suggested strategy entails several careful actions intended to resolve the BNB Bridge exploits. Liquidating the exploiter’s USDT and USDC positions is a key scheme component. In addition, the proposal describes how the XVS tokens assigned to the exploiter’s account might be claimed, seized, and sent to the Venus treasury. This methodical approach benefits the community treasury and the BNB Chain by ensuring that it makes every attempt to pay down the exploiter’s debts and address any potential shortage.
Even if it’s a vital part of the plan, the forced liquidation procedure has expenses. The anticipated cost is 10%, of which 5% will go to the community treasury and the remaining 5% to BNB Chain. These fees, crucial in contributing to the overall shortfall repayment, ensure the financial stability of the BNB Chain ecosystem.
Asset recovery and redeeming protocol fees
The plan elaborates on a comprehensive asset recovery strategy designed to actively target the retrieval of the remaining BNB assets from the exploiter’s holdings upon the complete repayment of existing debts. During this phase, the protocol will redeem the collected protocol fees to further strengthen the financial stability of the ecosystem.
Protecting the interests of the Venus Protocol and the larger BNB Chain community is a top priority throughout the proposal. The approach guarantees preserving the community’s financial stability and addressing the exploiter’s acts.
BNB’s Market Performance
The plan’s main goal is to lower liquidation risk, which impacts BNB’s pricing dynamics. If successfully implemented, this could reduce the volatility associated with liquidation events, leading to a more stable BNB market.
BNB had dropped more than 2% on the previous day as of the time of writing. As per CNF, the cryptocurrency has a market capitalization of more than $36.6 billion and was trading at $241.66. With its current market value, BNB is the fourth-largest cryptocurrency, and these figures support that ranking.
BNB Chain’s proactive approach to addressing the BNB Bridge exploiter’s debt and reducing liquidation risk underscores its commitment to maintaining a robust and stable ecosystem.
