Venus Protocol Exploit Results in $3.7M Loss through Supply Cap Manipulation

On March 15, 2026, Venus Protocol experienced a significant exploit resulting in a loss of $3.7 million. The attacker manipulated the supply cap of THE tokens, accumulating 84% of the total supply since June 2025. By transferring these tokens to the protocol contract, the attacker inflated the collateral value and engaged in recursive price manipulation using TWAP oracle delays. As a precaution, Venus Protocol suspended borrowing and withdrawal functions for THE tokens, while other markets remained operational. A preliminary analysis indicates that the attack exploited low on-chain liquidity and price manipulation tactics. Venus Protocol has committed to transparency and plans to release a full report following the investigation.

Key Points: • Venus Protocol lost $3.7 million due to a supply cap manipulation exploit. • The attacker held 84% of THE tokens, using them to inflate collateral values. • Borrowing and withdrawal for THE tokens have been suspended as a precaution.