Binance has come to the fore this week with allegations that it is selling Bitcoin to protect the BNB price. Responding to the rumors, CEO CZ explained that this is mathematically impossible.
Binance CEO once again denies that his exchange is selling Bitcoin
cryptocoin.com As you follow, Binance has come under fire this week for allegations that it is selling Bitcoin. Crypto analyst zkHopium addressed concerns about the BNB liquidation event on Venus Protocol in a recent tweet. In this article, we have included what you need to know about Venus and its relationship with BNB. ZkHopium says it is unlikely that Binance will sell Bitcoin to protect the BNB price because of this. You can view the details of the report here:
TLDR – The FUD seems to be without much fundamental basis, and BNB being market dumped is unlikely to happen.
As always, all thoughts are my own, NFA DYOR!
P.S. This is a repost with updates, and written after checking facts with core teams from Venus Protocol and Binance.
— zkHopium 📈 (@zkHopium) August 24, 2023
“It’s crazy to think about it”
ZkHopium’s report received congratulatory messages from Binance CEO. The analyst’s focus was on the potential impact of a $30 million sale on Bitcoin price. CZ emphasized that $30 million represents less than 0.001% of BTC’s daily trading volume.
Meanwhile, zkHopium argued that the origin of the FUD narrative dates back to October 2022. This was especially when the Binance Smart Chain (BSC) ecosystem was hit by a hack attempt. During the incident, a hacker minted two million BNB.
What happened at Venus Protocol?
According to the analyst, an experienced hacker has invested about 900,000 BNB in Venus Protocol. He then borrowed about $150 million in USDT and USDC using these deposits. However, in response to this, the BNB Chain community burned more than two million BNBs, approximately $550 million. Similarly, the Venus Protocol implemented a management proposal (VIP-79). The proposal approved BNB Chain as the sole liquidator of the loan used.
In addition, Binance Chain has funded the specified liquidator wallet with 30 million BUSD in December 2022 to facilitate the upcoming liquidation process. The analyst also reported that $30 million USDT was injected in June 2023. In addition, he underlined that it has a similar value in August.
In particular, zkHopium stated that the liquidation mechanism of the Venus Protocol includes a predetermined collateral. This means that liquidators can cash out up to 50% of the collateral within the limit. They can also instantly pocket 10% of the fees if they want to.
This level is critical for Binance and BNB
Meanwhile, the upcoming liquidation threshold for BNB is currently at $196. This level had previously emerged as $220 and then $210. According to ZkHopium, current developments show that the liquidator has repaid 60 million USDT. The payback ended with the liquidation of 296,583 BNB.
