Proposed Compensation Framework for Users Affected by the wBETH Depeg

Venus Governance Venus - Governance Discussions
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Following our internal investigation and collaboration with Chaos Labs, we are proposing the following framework to compensate users impacted by the wBETH price depeg.

Compensation Details

  • Eligibility: Users who were liquidated while using wBETH as collateral on 10 October 2025, between 21:43 and 23:30 UTC, as verified by Chaos Labs’ price analysis.
  • Refund: Venus Labs will refund the full 10% liquidation fee, which includes the 50% share taken by liquidators, from applicable liquidations during this period.
  • Payment Method: Compensation will be distributed in stablecoins.

This proposal is based on verified user claims and a comprehensive review of price data, liquidation events, and risk parameters conducted in collaboration with Chaos Labs. For detailed verification and reference, please wait for the analysis to be shared by Chaos Labs, who have analysed the start and end times of the depeg affected Venus users.

After careful consideration, we believe this approach is the most fair, transparent, and efficient path forward to make affected users whole. We will begin contacting all users who have reached out to us to move the process along quickly.

As this will be a community-driven decision, we welcome your comments and feedback below.

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Thanks to the Venus Labs team for addressing this matter transparently and for presenting a structured compensation proposal.
This is certainly a step in the right direction in terms of communication and accountability, and I truly appreciate the effort put into engaging with the community.

That said, I personally don’t agree with issuing refunds for this event.
Venus is a decentralized protocol, and every user should be aware of the inherent risks linked to depeg scenarios, oracle fluctuations, and liquidation dynamics.
Compensating affected users — even partially — may set a precedent that weakens the principle of individual responsibility and creates unrealistic expectations for future market events.

Still, I recognize the positive intent and governance value behind this proposal.
Refunding the 10% liquidation fee (including the liquidator share) demonstrates a sense of accountability and willingness to support users who were most impacted.
However, I believe the framework could be refined and improved in a few areas:

Eligibility clarity: it would be helpful for the team to clearly define the exact criteria used to determine who qualifies for compensation.

Verification process: publishing a transparent and verifiable list of affected addresses would enhance trust and reduce speculation within the community.

Future prevention: beyond compensation, Venus could benefit from stronger risk-mitigation measures — such as refined parameters for pegged assets, faster liquidation triggers, or improved alert systems for abnormal oracle or market movements.

Overall, while I disagree with direct refunds, I fully support the transparency, structure, and communication demonstrated in this process.
If this initiative leads to better preventive mechanisms and clearer risk management in the future, it will still represent a valuable outcome for the Venus ecosystem.

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How is it possible that the loss caused by your Oracle’s low price is only 10%? I used 20 wbeth and 3500uni as collateral, with a value of 100000u+. I only borrowed 40,000u, but it was liquidated and I only suffered a 10% loss?

I think the ETH price for liquidation must be taken into consideration.

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At first I was completely opposed to the compensation. I thought the team’s intention was to restore the full underlying asset, which would have meant compensation of several hundred thousand, totally unfair to socialize among all users. Now that I see the proposal is limited to refunding fees, it seems more coherent and I am willing to support it. I understand the affected parties’ frustration, but what happened is part of the risk assumed when investing in these decentralized instruments. I will vote in favor.

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  • The great thing here is that the team didn’t try to dodge the issue that affected so many users of the protocol. They immediately reassured their users right at the time of the liquidation incident, then discussed and came up with ways to protect their community. Very few teams and platforms do this—even some big CEXs just ignore it outright. In my opinion, it’s fair to compensate users for losses from liquidations caused by oracle price deviations. That difference should be covered. It’s fairer than just reimbursing 10% of the liquidation fee, since everyone was impacted by the deviation in the oracle liquidation price, where WBETH should have been liquidated at a much higher price.
  • It should be done by recalculating the correct value of WBETH based on the redeem contract at that time and subtracting the debt the user borrowed, then refunding the remaining assets to the user in USD value. There might be a slight loss in token price compared to now, but I think everyone would agree to that small loss. I hope the protocol can roll out the refund soon to protect its users. Thanks.
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I support this proposal. I want everyone to realize that this is not a simple depegging of WBETH, but a situation where a minimal-risk lending pool went from a 1 WBETH:1.08 ETH ratio to 1:0.2, leading to the liquidation of nearly all users in this core lending pool.
Everyone knows that buying WBETH at 0.2 would allow them to redeem 1 ETH after seven days—no rational person would sell WBETH under such conditions. This was entirely caused by a single oracle failure resulting in abnormal liquidations. If these users are not compensated, who would dare to use Venus for lending in the future? Even users with health factors above 3, 5, or even 10 were completely liquidated.

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I do not support this proposal.

I am one of the users affected by the recent wBETH depeg incident. It has been a sleepless night, and I have suffered significant financial losses. I did nothing wrong—if the oracle functioned properly, none of these losses would have occurred.

I have been using the Venus protocol since beginning and am also a Prime token holder. This unexpected liquidation has left me deeply frustrated, especially when seeing that users of other protocols, such as Lista, were not affected at all. The contrast makes this experience even more disheartening.

When we are discussing the issue of the wBETH depeg, what exactly does “depeg” mean? As long-time users of the Binance ecosystem, we all understand the nature of Binance-Peg assets on the BNB Chain. If Binance itself has not experienced a crisis, then assets on the BNB Chain—whether BETH or wBETH—should not have any issues. Furthermore, the consequences of using wrong oracle prices on the BNB Chain have now been painfully demonstrated by the losses suffered by all affected users.

The purpose of the Risk Fund is to protect users who use the protocol properly from suffering losses caused by unforeseen and non-user-related incidents. What is the most important foundation of a decentralized lending protocol? It is user confidence. The current proposal fails to adequately compensate the victims for their losses — it neither provides comfort to those affected nor helps to preserve the reputation of the protocol. Therefore, as a long-term user of Venus, a Prime token holder, and an affected user, I firmly believe that a fair and reasonable compensation plan should be implemented for this incident. This approach will protect the protocol’s core values in the long run, maintain user trust, and demonstrate Venus’s strength when competing with other protocols. It is also the best way to safeguard the long-term value of XVS.

Venus has faced many challenges on its path to growth, yet it has emerged as a cornerstone of the BNB Chain precisely because of user support and confidence. If users suffer massive losses through no fault of their own, what consequences will that bring to the protocol’s future? Anyone could become a victim of such unexpected events—so the question is, what kind of protocol would you rather continue to support?

Finally, I’d like to quote an ancient proverb: “Lose something in the east, but gain something in the west.” By providing fair and reasonable compensation to the victims today, the protocol will gain greater support and a stronger reputation in the future.

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I do not agree to compensating 10% of the liquidation fee, because the losses suffered by users who staked Wbeth are far greater than this 10% liquidation loss. I hope users can be treated in a friendly manner. The assistance provided at this moment is even a demonstration of the courage and capability of VENUS, the largest cornerstone project on the Bsc chain.
First of all, the Venus project has done an excellent job in terms of security, which is an undeniable fact. However, there were indeed some flaws in the oracle setup for Wbeth this time. Combined with the issues caused by Binance’s mistakes in liquidity management, it’s worth noting that Binance had already released an announcement a few days before the incident, planning to revise the weight algorithm for Wbeth collateral.

Secondly, isn’t the purpose of risk funds to address issues like these? On one hand, they can compensate users for financial losses; on the other hand, they can help build a better impression and gain trust from users, thereby attracting a larger user base. As a Binance user myself, I chose VENUS—the most influential protocol on BSC—for this reason. Otherwise, I actually have many other options to consider.

Finally, I hope VENUS can provide users with a more reasonable compensation plan, rather than just 10% of the liquidation fees.

This is not about the gain or loss of funds in one or two instances, but about adhering to a “user-first” philosophy. This approach will ultimately help the project recover more revenue and win greater trust.

As a VENUS user for three to four years and also a victim of this incident, I hope to receive reasonable compensation.

To add one last point, I could have chosen Lista for staking and lending earlier, where the interest rate is lower. However, I ultimately opted for VENUS—even though its lending rate is slightly higher—because I have greater trust in VENUS.

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I disagree with the above compensation plan.

Due to the objective failures of WBETH depegging and the oracle, many innocent users have suffered significant financial losses. In this WBETH depegging incident, the financial losses suffered by users who staked WBETH are far greater than the 10% liquidation loss.

As an affected user in this incident, I urgently hope that Venus will fully consider from the users’ perspective and provide reasonable compensation to the affected users, rather than merely reimbursing 10% of the liquidation fee. The risk fund established by the platform is precisely set up to deal with such unforeseen emergencies. Reasonable compensation will not only enhance users’ confidence in the sustainable development of the Venus platform, but also establish Venus’ influence and responsibility as the most influential protocol on BSC.

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I do not agree with this proposal. It does not provide true compensation; it merely refunds the liquidation fee that should not have been incurred in the first place.
The core issue of this incident lies in the losses suffered by users due to the wBETH depeg, which led to their assets being liquidated at a significantly lower price. Most users had their wBETH sold at approximately 1,000 USDT, far below its fair market value at the time.
Therefore, I believe the optimal compensation plan should cover two key parts:
The price difference between the actual selling price of wBETH during the liquidation and the fair market price at that time.
The full 10% liquidation fee.
I urge the Venus team to listen to the community’s voices and revise the compensation proposal accordingly. I also trust that the Venus team will take necessary measures to safeguard the fund security of all users, allowing us to continue using Venus without any concerns in the future.

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Totally disagree this proposal. This compensation plan is equivalent to selling the user’s collateral at the erroneous market price at the time of liquidation to repay the user’s debt. Who would sell wbeth at a price of 0.2eth to repay the debt? Currently, Venus first takes the initiative to assume responsibility and declare that it will compensate the affected users, but it is not as generous as Binance, nor does it dare to hold Binance accountable for the pressure, so the so-called inferior plan of full compensation for the 10% liquidation fee has emerged, completely avoiding the true impact of the erroneous pricing of wbeth and the harm it brings to the users.
I thought the most basic compensation plan was,

The quantity of liquidated collateral C1/C2/… and the corresponding prices P1/P2/… on the day of compensation, the total debt D offset at the time of liquidation (measured in USD on the day of compensation)

Compensation amount (in stablecoin terms): C1P1 + C2P2 + … + Cn*Pn - D