According to Foresight News , Venus Protocol has released a statement regarding the THE market attack. The attack affected the Venus Core market, while Venus Flux remained operational. This was not a flash loan attack; the attacker had been accumulating THE tokens over the past nine months and exploited a supply cap execution vulnerability in the protocol's legacy code to bypass the 14.5 million THE supply cap by directly transferring funds to the protocol contract.
Subsequently, the attackers manipulated the price of THE by exploiting the low liquidity of the on-chain DEX, and continuously amplified the value of their collateral through cyclical operations (borrowing assets, exchanging them back for THE to drive up the price and inject them into the market). Venus has currently suspended the THE market and set its collateralization factor (CF) to zero. As a precaution, it has also suspended collateralization functionality in the BCH, LTC, AAVE, POL, FIL, TWT, UNI, and LISUSD markets. Venus Labs is conducting an investigation with its security partners and will release a full audit report and strengthen supply cap enforcement and price monitoring mechanisms.
