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- FUD has been circulating {that a} BNB liquidation occasion led Binance to dump Bitcoin.
- Binance’s CEO dismissed the claims, saying the $30M sale has negligible influence on BTC.
- A crypto analyst argues the liquidation occasion is unlikely.
In a latest tweet, crypto analyst zkHopium addressed the issues surrounding a BNB liquidation occasion on the Venus Protocol. The priority is that the anticipated liquidation has induced Binance to dump Bitcoin (BTC) to safeguard BNB’s worth.
zkHopium’s detailed thread addressed the claims and dismissed them as FUD. The CEO of Binance, Changpeng Zhao expressed appreciation for the great analysis. Zhao argued the irrational nature of the FUD narrative that had gained traction.
Notably, the main focus was on the potential influence of a $30 million sale on Bitcoin value. Zhao highlighted that $30 million represents lower than 0.001% of the day by day buying and selling quantity of BTC.
In the meantime, zkHopium argued the genesis of the FUD narrative dates again to October 2022. It was significantly the time an exploit hit the Binance Good Chain (BSC) ecosystem. Through the incident, a hacker minted two million BNB.
In accordance with the analyst, the scammer deposited round 900k BNB onto the Venus Protocol. Then, the hacker utilized the deposit to borrow and extract roughly $150 million value of USDT and USDC.
Nevertheless, in response, the BNB Chain neighborhood burned over two million BNB, roughly $550 million. Equally, the Venus Protocol executed a governance proposal (VIP-79). The proposal accredited BNB Chain as the only real liquidator for the exploited mortgage.
Additionally, BNB Chain funded the required liquidator pockets with $30 million BUSD in December 2022 to facilitate the forthcoming liquidation course of. The analyst additional highlighted that it injected $30 million USDT in June 2023 with an analogous worth in August.
Notably, zkHopium talked about that Venus Protocol’s liquidation mechanism entails a predetermined collateral. It implies that liquidators can liquidate as much as 50% of the collateral upon restrict whereas pocketing 10% in charges. In the meantime, he estimated the approaching liquidation threshold to be roughly $196 BNB value.
In accordance with zkHopium, present developments point out that the liquidator has repaid $60 million USDT. The compensation resulted within the liquidation of 296,583 BNB. The analyst concluded that the FUD round BNB liquidation lacked a basic foundation.