BNB Chain Tries to Prevent Mass Sell-Off Due to Liquidation

BNB Chain has stepped up amid fear over the potential liquidation of over 924,830 BNB tokens by assuring the community that it would take over their positions if the liquidity threshold is hit.

A BNB Chain hacker’s position is on the verge of liquidation, and hence the community fears a sharp price drop due to liquidations.

BNB Chain to Rescue?

A BNB Chain hacker has a 924,830 BNB lending position on the decentralized finance (DeFi) platform Venus Protocol. If the hacker does not repay the loan or increase the deposit, their position might get forced close, resulting in increased selling pressure. 

According to a governance proposal passed by the community last year, the BNB chain will whitelist the liquidation of the hacker’s position to prevent the impact on the price due to sell-off.

Today, the chain reassured of its commitment through a tweet:

According to the governance proposal below, the BNB Chain core will take over the $BNB position on Venus if the BNB price hits the liquidation threshold.

DeBank shows that the health rate of the exploiter’s position worth over $217 million is 1.07. Eventually, the assets will hit the liquidation threshold if the health rate drops below 1.

BNB Tokens Jumps Over 6%

Wu Blockchain estimates that $220 is the liquidation price for the exploiters’ position. But after BNB Chain’s announcement, the token jumped around 6.87% in a couple of hours, currently trading at $235.60.

In October 2022, the hacker 0x489a stole two million BNB and had been diversifying funds across various liquidity pools.

In a separate development, Binance announced the delisting of over 19 spot trading pairs. The exchange will remove the trading pairs on Wednesday.

Got something to say about the BNB chain or anything else? Write to us or join the discussion on our Telegram channel. You can also catch us on TikTok, Facebook, or Twitter.

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.