Venus Protocol has released a statement regarding the THE market attack. This incident affected the Venus Core market, while Venus Flux was unaffected. The team stated that this was not a flash loan attack; the attackers had been accumulating THE tokens over the past nine months and exploited a supply cap execution vulnerability in the protocol's legacy code to bypass the 14.5 million THE supply cap by directly transferring funds to the protocol contract. The attackers then manipulated the THE price using the low liquidity of the on-chain DEX, continuously amplifying the collateral value through a recursive loop (borrowing assets, exchanging them for THE to drive up the price, and then injecting them back into the market). Venus has currently suspended the THE market and set its collateralization factor (CF) to 0. As a precaution, it has also suspended collateralization functionality in the BCH, LTC, AAVE, POL, FIL, TWT, UNI, and LISUSD markets. Venus Labs is investigating with security partners and will release a full post-incident report.