ChainThink report, March 16: Venus Protocol has released updates on the ongoing abnormal activity in the THE liquidity pool. In addition to previously pausing THE borrowing and withdrawal functions, the protocol has now set the Collateral Factor (CF) to 0 for seven markets as a preventive measure targeting those with excessive concentration of collateral held by a single user. The affected markets include BCH, LTC, UNI, AAVE, FIL, TWT, and lisUSD. All other markets remain unaffected and continue normal operations.

Initial assessment indicates the attack methodology began in June 2025, when the attacker gradually accumulated THE tokens through legitimate deposit mechanisms, ultimately reaching 84% of the token cap (approximately 12.2 million THE). Yesterday, the hacker directly injected THE tokens into the protocol contract, instantly inflating the supply and creating massive collateral value. The attacker then executed a recursive price manipulation loop: depositing THE, borrowing other assets, using borrowed assets to purchase more THE on-chain, and waiting for TWAP oracle updates to trigger price increases.

Venus states it remains committed to transparency and will release a comprehensive report following the conclusion of its investigation.