Venus Protocol Suffers $3.7M Loss in THE Token Attack

Venus Protocol, a major decentralized lending platform on the BNB Chain, suffered losses exceeding 3.7 million dollars over the weekend due to a sophisticated supply cap attack involving the low-liquidity Thena token, known as THE.

The exploit targeted vulnerabilities in the platform's collateralization model, allowing an attacker to manipulate the THE token's perceived value and liquidity. Blockchain data indicates the attacker, using an address beginning with 0x1a356231, began accumulating approximately 84 percent of THE's total supply—around 14.5 million tokens—over nine months starting in June 2025. This concentration enabled the entity to bypass the protocol's supply cap by directly transferring tokens to the lending contract, a method known as a donation attack. The maneuver inflated the collateral position to about 53.2 million dollars in THE, nearly three and a half times the permitted limit.

With the manipulated collateral in place, the attacker executed a looping strategy: depositing THE to borrow assets, using those proceeds to purchase more THE, and waiting for the platform's time-weighted average price oracle to update and reflect the artificially boosted valuation....