Venus (XVS) Flash Crash Triggers $1.09M Whale Liquidation
- Venus plunged over 30% in minutes, breaking its range and triggering forced liquidations.
- A whale looping 532,000 XVS was liquidated, with losses estimated near $1.09 million.
- XVS remains fragile as health factors stay near liquidation thresholds post-crash.
Venus (XVS) recorded a sharp price shock on January 29, 2025, when the governance token suffered a flash crash on Venus Protocol. Around 8:05 a.m. UTC, the price of Venus, XVS fell more than 30% in about ten minutes. The flash crash drew attention to a widening gap between Venus Protocol’s on-chain activity and the market valuation of its governance token.
Before the drop, Venus, XVS traded near $4.40 in a relatively stable band. Selling pressure increased quickly and pushed the token down to an intraday low of $3.12. As of press time, XVS is trading at $3.72, down by 24% over the past day.
Source: TradingView
Whale Venus, XVS Loop Position Hit With $1.09M Liquidation
On-chain analyst EmberCN reported details of one large address affected by the decline. The report stated that a whale who looped on Venus to buy about 532,000 tokens worth roughly $2.81 million was liquidated during the flash crash.
According to EmberCN, the address built this exposure through a looping strategy. The trader deposited Venus, XVS on Venus Protocol, borrowed USDT, and used the borrowed funds to purchase additional Venus XVS. In total, the account borrowed about 1.4 million USDT and used that debt to accumulate the 532,000-token position.
Each loop increased both the size of the XVS holding and the outstanding USDT liability. This structure raised the account’s sensitivity to downward price movements in the governance token. Once the market turned lower, the collateral value fell against a fixed debt level.
EmberCN noted that the broader move in XVS ran from about $5.30 to near $3.10 over the one-day period. That drawdown pushed the address beyond its liquidation threshold on Venus Protocol. During the flash crash phase, 287,000 Venus XVS were liquidated to repay approximately $930,000 USDT, with the reported liquidation price near $3.23.
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The analyst estimated that the whale’s total loss on the trade could reach about $1.09 million. That figure reflected the gap between the cost of acquiring Venus, XVS and the value after liquidation events. It also included the impact of forced selling at lower prices.
XVS Whale Position Remains at Risk After Flash Crash
After the liquidation cycle, the remaining position still showed elevated risk. EmberCN reported that the health factor for the XVS exposure stood near 1.07 on the protocol. If the token price were to fall below about $3.20, the account would face further liquidations under existing collateral rules.
Data from analytics platform CoinGlass described the wider impact on traders. CoinGlass recorded total liquidations of about $379,580 linked to the XVS move. Long positions accounted for roughly $338,970 of that sum, while short positions saw around $40,610 in liquidations.
Source: CoinGlass
Venus Protocol operates on the BNB Chain as an algorithmic money market. Users could supply assets and borrow against posted collateral. The Venus XVS token is used for governance and for fee distribution inside the protocol, linking its price to activity and collateral conditions on the platform.
The XVS flash crash underscored ongoing challenges for DeFi governance tokens. While Venus Protocol maintains on-chain utility, token valuation remains sensitive to leverage and market risk appetite. The event highlighted how governance tokens could trade independently of protocol activity during periods of reduced demand for DeFi risk.
