Emergency Vote: Resume Venus Safely & Recovering user stolen Funds

TL;DR: A user was the victim of a phishing attack. To protect them, the protocol was immediately paused. We now propose a partial resume so that users can manage their positions and avoid liquidations, while also force-liquidating the attacker’s wallet. Once a full security review is complete, the protocol will be fully resumed.

What happened

We have confirmed this was a phishing attack in which the victim unknowingly signed a transaction authorizing the attacker to borrow and withdraw from Venus Protocol on their behalf. As a result, funds were drained from the victim’s wallet into the attacker’s.

Fortunately, the suspicious transaction was identified almost immediately, and Venus Protocol was paused. Because of this quick response, the stolen funds remain locked in the attacker’s wallet and this is why Venus is currently paused.

Why this vote matters

We are fully aware of the market risks of keeping Venus paused. But above all, we are committed to protecting our users and our community. In an industry plagued by bad actors, we believe protocols should stand by their users whenever possible.

This is why we are calling for a fast-track Snapshot vote: time is critical not only for the affected user, but also for the broader Venus community.

Proposed plan

1. Within 5 hours — Partial restoration of Venus Protocol.

   • Users will be able to adjust their positions (repay debt / supply funds) and avoid liquidations (which remain paused).
   • This action will be performed through a Guardian transaction.

2. Within 7 hours — Force-liquidate the attacker’s wallet.

   • Stolen funds will be recovered in a single transaction.
   • This will not affect any other user positions on Venus.

3. Within 24 hours — We will continue to do a complete security review on Venus to prevent any replication of this attack on any other users.

   • We will perform a full review of Venus contracts to ensure this attack cannot be replicated.

4. Venus Protocol will be resumed fully

   • Venus Protocol will be resumed fully, and we will continue to provide transparent updates to you via X throughout this process.

Call to action

As time is of the essence, please cast your vote on this Snapshot within 1 hour. If approved, we will immediately execute the plan outlined above.

Hackers have no place on Venus. Thank you for your patience, understanding, and continued trust as we work tirelessly to protect our users, safeguard our community, and uphold the integrity of the Venus Protocol. The community is the foundation of Venus, and we will always act in your best interest.