Venus releases liquidation event report: no insider trading Swipe team no longer involved

Venus official reverted to the events of the liquidation.

The large liquidation event released by Venus, the largest lending protocol on the Coin Smartchain, on May 19, 2021 was questioned by some investors as insider trading by the team.

On May 31, 2021, Venus released an analysis of the large liquidation event stating that no specific market participant stole funds from the protocol in the liquidation event, and that the main reason was that the Swipe OTC system was abused to place several large OTC orders to the XVS buyer and BTC seller. Due to the liquidators, the account starting with 0xef044 had a net loss of $66 million, after having accumulated 1.3 million XVS since January, losing all its funds in this incident. The buy volume in the spot market at the time was approximately $177 million, with the seller making a profit of approximately $55 million. Subsequently, the liquidators continued to liquidate and arbitrage on-chain by using flash credits to take away collateral, and a chain liquidation ensued.

Venus official analysis of the events
Venus protocol encountered a massive liquidation event due to market conditions and prophecy machine issues (it is important to note that this is an eco-logical issue.) Venus should have an Oracle very similar to MakerDAO, which enables users to have a window of one hour and a price for the next hour. This is how users will be protected in the future; market fluctuations caused by any factor (manipulation, price appreciation, bad news, etc.) should not hurt users.

Regarding market conditions, the Swipe OTC system was misused to place several large OTC orders to XVS recipients and BTC manufacturers. This customer had previously purchased from us on several occasions and was one of over 300 approved funds we worked with. However, due to this abuse, the participant also did not receive VRT airdrops.

As a result of the liquidator, the party lost $66 million in net capital. From January until the incident, the account had accumulated over 1.3 million XVS and subsequently lost all of its funds. Based on the data we collected with the help of our members and partners, the issues here fall into the following categories.

Spot market purchases amounted to approximately $177 million. Sellers who sold up to this purchase volume are defined above as the group of sellers with revenues of approximately $55 million. Then there is the point at which arbitrage and liquidation occurs, which also gains some profit. At this point, there are liquidators fighting this OTC buyer, as evidenced in the following factual timeline, which we have verified with third party deposit/purchase/sale logs.

Venus releases liquidation event report: no insider trading Swipe team no longer involved

At approximately 17:58, the first clearing occurs, and then XVS to XVS clearing occurs, obtaining more than $5 million (at the event market price) in free XVS. this starts the cascading free fall.

This can be observed mainly by two types of liquidators, who receive free XVS without repayment by using Flash Loan technology.

Free XVS through Flash Loan.

Venus releases liquidation event report: no insider trading Swipe team no longer involved

The liquidator takes collateral.

Venus releases liquidation event report: no insider trading Swipe team no longer involved

Chain liquidation and arbitrage continue to occur, constantly pushing up volume and pushing up prices, as follows.

Venus releases liquidation event report: no insider trading Swipe team no longer involved

The price then bottoms out and is then pushed higher, as follows.

Venus releases liquidation event report: no insider trading Swipe team no longer involved

These cycles occurred several more times as liquidators were pushing prices up and down to continue to make profits, as follows.

Venus releases liquidation event report: no insider trading Swipe team no longer involved

Again below when market conditions also start to decline

Venus releases liquidation event report: no insider trading Swipe team no longer involved

Since then, market conditions have started to fall as BTC and ETH have crashed, followed by the collapse of XVS, and naturally more liquidations have occurred.

Follow up
Venus said that the Venus Grants Program (VGP) will take out approximately 1.2 million XVS to the OTC market and exchange them for BTC/ETH through counterparties and deposit them back into the agreement. These XVS will be gradually liquidated over no less than 3 months to minimize the impact on XVS holders.

Also Venus is a decentralized project and a fair start, but it was greatly assisted by the Swipe team and had to share their resources for several months. the Swipe core team and Joselito (note: Joselito is the founder and CEO of Swipe and founder of Venus Protocol) will no longer be involved in Venus. Swipe will focus on its own projects and become a majority-owned company by Binance, while Venus will use its own dedicated resources for its own development through its soon-to-be-formed Venus Committee.

Swipe will be completely isolated from Venus’ resources and team, and the old OTC business will be closed, and Venus’ original team and management will be reorganized.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/venus-releases-liquidation-event-report-no-insider-trading-swipe-team-no-longer-involved/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2021-05-31 06:05
Next 2021-05-31 06:38

Related articles