Summary
In order to optimally manage the debt positions on Venus that resulted from the September 2022 BNB Bridge incident, and in light of future liquidity risk of BUSD, BNB Chain proposes to upgrade the vToken contracts on USDT, USDC and ETH for the purpose of swapping BUSD debt on behalf of the exploiter’s account into other more sustainably liquid assets.
Rationale
With the recent velocity of BUSD liquidity into other assets , there exists an increasing liquidity risk that can impact the viable liquidation of the exploiter’s $60M BUSD debt position on Venus. With the proposed upgrade, BNB Chain will intervene on behalf of the exploiter’s account to swap the position into debt in more liquid markets such as USDT, USDC and ETH. Doing so will ensure immediate remediation of this risk without having to liquidate the debt and avoid the subsequent market impact that can introduce on such a large position.
Proposed Upgrade
Implement a borrowBehalf function, that would allow a delegated BNB Chain address to receive the borrow on behalf of the attacker address.
Conclusion
Following adoption and execution of this upgrade, BNB Chain will immediately begin swapping the exploiter BUSD debt into other markets over the course of a week.
