There is no confirmed evidence that the Venus protocol has suffered a liquidation shortfall of ~$2.15 million as a result of a hack that manages collateral liquidation. Current reports do not confirm this number or exact scenario.
Known coverage of Venus Protocol events in 2024–2025 varies in number and cause. Until credible sources confirm the $2.15 million claim, it should be treated as unconfirmed.
What is DeFi’s liquidation gap and why is it important?
In decentralized lending, the liquidator sells the collateral when the borrower’s position is lower than required. A liquidation deficiency occurs if the proceeds of the sale of the collateral do not completely eliminate the debt.
The loopholes are important because the remaining defaulted debt can be turned into a risk fund that can be absorbed by governance mechanisms or affect the protocol’s stakeholders if the protection fails. Oracle’s clear design and liquidity depth mitigate this risk.
As reported by Forklog, in February 2024, oracle manipulation took advantage of the exchange rate increase in the wUSDM ERC‑4626 package, which affects Venus; The estimated impact was about $716,000 and the attacker’s profit was about $200,000 (https://forklog.com/en/experts-unveil-details-of-oracle-manipulation-attack-on-venus-protocol/).
According to FXLeaders, a phishing attack on the bnb chain in September 2025 led to an extraordinary “forced elimination” of exploiter positions, which led to the recovery of approximately $13.5 million. (https://www.fxleaders.com/news/2025/09/03/venus-protocol-recovers-13-5m-in-phished-funds-after-emergency-governance-vote/).
Based on posts on the Venus community forum, current management work is focused on addressing gaps and compensation frameworks; no new fee-related defects match the $2.15 million (https://community.venus.io/t/proposal-for-revision-of-venus-protocol-tokenomics-v4/4411).
How failures occur: oracle manipulation, storage tokens, invalidation
According to arXiv data, liquidation dynamics can be distorted by MEV, payment effects, and oracle construction, which allows small price reductions to enter nonperforming loans when collateral markets are thin (https://arxiv.org/abs/2602.12104).
The mechanics of collateral liquidation and exchange rate trend risks
In a typical foreclosure, the liquidators repay the loan and take the collateral at a discount using rates from the oracle. If the oracles raise the wrong or slippage prices during the sale, the income can completely cover the debt and cause a shortage.
Exchange rate Vault tokens, like ERC‑4626 packages, offer another avenue of failure: attackers can raise the value of shares against an overvalued asset before borrowing and liquidating themselves. As discussed by OpenZeppelin, ERC‑4626 tokens in integrated DeFi systems may face “exchange rate manipulation risks” (https://blog.openzeppelin.com/erc-4626-tokens-in-defi-exchange-rate-manipulation-risks).
The roles of Chaos Labs and PeckShield in incident assessment
As reported by Coinglass, security companies such as PeckShield detect suspicious wallet activity, verify recoveries, and log exploit timelines to support incident transparency (https://www.coinglass.com/news/687801).
Chaos Labs conducts risk analysis and public research that examines token behavior, oracle selection and liquidity conditions, provides information on parameter updates and management responses during and after events.
Venus Protocol Hack Questions
What confirmed security incidents did the Venus Protocol experience in 2024–2025 and how much money was lost?
February 2024: The wUSDM oracle manipulation affected Venus (~$716k). September 2025: Phishing leads to emergency shutdown; about 13.5 million dollars were raised. An approved deficit of $2.15 million.
How did the wUSDM oracle manipulation attack work and how did it affect Venus users?
The attacker inflated the wUSDM exchange rate using the donation-to-treasury mechanism, then borrowed and liquidated against the overstated value, leaving Venus with an estimated exposure of ~$716k.
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