Binance CEO #ChangpengZhao (CZ) has addressed claims that Binance significantly sold down #bitcoin (BTC) in reaction to growing rumours and accusations making the rounds in the cryptocurrency community. A price decline of 7% for Bitcoin has been attributed to these assertions.
CZ responded on Twitter by retweeting a thread from user ZkHopium, who presented a thorough analysis refuting the accusations and identifying the situation's core causes.
The ZkHopium thread clarifies the circumstances around the Venus Protocol liquidation of Binance Coin (BNB). It indicates that the exploit took place on the #Binance Smart Chain (BSC) on October 6th, 2022, producing 2 million BNB.
Of this sum, 900,000 #BNB were put on Venus Protocol to borrow USDT and USDC valued about $150 million. In retaliation, the BNB network destroyed more than 2 million BNB, which at the time was worth around $550 million, thereby eliminating these tokens from circulation.
Venus Protocol approved a governance proposal naming BNB Chain as the sole liquidator for the loan in order to speed up the liquidation procedure. The liquidator's wallet was then replenished by BNB Chain with 30 million BUSD in December 2022, 30 million USDT in June 2023, and 30 million USDT on August 21, 2023.
A collateral component or liquidation threshold is a part of the Venus Protocol's liquidation process. Liquidators can progressively liquidate up to 50% of the collateral when triggered, earning an extra 10% of the collateral's value in fees.
ZkHopium's study points up a number of important elements that distinguish this example from others. One liquidator in particular is not motivated to engage in market dumping, to start with. Second, no bots are used to front-run the liquidations; instead, they are carried out manually.
Moreover, considering the amount of the loan, the liquidation tranches are anticipated to be substantially lower than the 50% mark.
Regarding the claims, #CZ acknowledged ZkHopium's thorough investigation and stressed the "insignificance" of the effect a $30 million liquidation would have on the price of Bitcoin.
CZ said that the majority of incentives are given in BNB and that Binance does not issue BTC. Although $30 million represents less than 0.001% of Bitcoin's daily trading volume, he emphasised that the purported concern of a substantial influence on the price of BTC is incorrect.
The chart above shows that BNB is now trading at $217 at the time of writing. For the previous 24 hours, it has just slightly decreased by 0.2%.
Bitcoin Hovers Almost $26,000 Despite Slight Decline
By market capitalization, Bitcoin, the most valuable cryptocurrency, is presently valued at $26,000 and has declined by 2.4% since briefly reaching the $26,700 level.
Keith Alan, a co-founder of the research and analysis company Material Indicators, has made the following observations on the market scenario despite the present low levels of volatility:
The economic data that was provided this morning had little effect on volatility, but it will help shape the story that Jerome Powell will tell on Friday when he speaks at Jackson Hole.
The Jackson Hole Symposium is approaching, and interest in Federal Reserve Chairman Jerome Powell's remarks is growing. As a result, the Bitcoin market is starting to exhibit symptoms of heightened activity.
Keith Alan contends that while the economic data won't have an immediate impact on volatility, it will influence Powell's speech's narrative.
As the Bitcoin market gets closer to the weekend, this expectation will probably cause it to become more volatile. As Powell's speech progresses, traders and investors are preparing for any market swings in the anticipation that his remarks may have a substantial influence on the cryptocurrency market.
