On March 22, 2026, Eastern Eight Zone time, the DeFi protocol Venus and Resolv faced attacks and arbitrage on the same day, rapidly escalating security incidents on the blockchain. More dramatically, the two attackers, after succeeding, chose not to hide in the off-chain fiat world, but instead concentrated and exchanged about $28.56 million of the illicit gains into ETH spot. On one side, it was yet another breach of smart contract security; on the other, a rare massive buy order emerged passively—an unexpected black swan event creating a liquidity shock sitting atop the same price curve. Which will exert more dominance on short-term prices: this “forced-born” pump or the long-term trust fissures that might, over a longer period, undermine the entire valuation foundation of DeFi?

The Wounds of Venus and Resolv on the Same Day

On March 22, on-chain security monitoring tools almost simultaneously raised alarms: targeting the lending protocol Venus and the yield protocol Resolv. Public information shows that both incidents achieved arbitrage and attacks by exploiting the protocols' own vulnerabilities or design defects, but no authoritative disclosure of complete technical details has been made, leaving the outside world to reconstruct the outlines from the flow of funds. For users, the key fact is not which line of code was wrong, but a repeated demonstration of the reality that “assets were supposed to earn interest within the protocol, but were emptied within a short time.”

These types of concentrated security incidents harm the DeFi narrative by touching upon an old issue: composability—is it an efficiency miracle or a systemic risk amplifier? Venus and Resolv are not peripheral projects; there exist multi-layered nests of relationships between them and other protocols, involving collateral and liquidity. When a certain link is compromised, users naturally think, “Are my LPs and collateral positions exposed to similar attack surfaces?” This fear is not new, but under the DeFi scale of 2026, its amplification effect is evidently stronger.

In comparison to the early DeFi hacking events of 2020-2021, during which individual attacks often involved sums in the millions, the ecosystem was still expanding, and users were more likely to accept losses with a “testing ground” mindset. However, now, as protocol total value locked (TVL), on-chain fund density, and user participation continue to grow, any security incident is no longer merely a technical bug but an impact on the credibility of “entrusting assets to code.” The increased trust cost implies that after each attack, it becomes increasingly difficult to persuade users to return to highly composable and leveraged DeFi products.

Hackers Spend Over $28 Million to Buy ETH

From the funding path perspective, the subsequent operations of these two incidents ended up pushing ETH into the spotlight. On-chain data shows that the Venus attacker exchanged the funds for 2,257.3 ETH, corresponding to about $4.72 million; the Resolv attacker obtained 11,437 ETH, which corresponds to about $23.84 million. The total of approximately $28.56 million in spot buy orders was directed toward ETH’s secondary market, constituting an extremely rare “passive whale buy” without announcement or institutional roadshows.

The rarity of such buying pressure lies in its complete disconnection from traditional investment logic. The top priority for attackers is to “convert unknown chips into more liquid, harder-to-freeze asset forms,” and currently, there are not many asset pools in the crypto market that meet this condition. Choosing ETH instead of stable assets like USDT or USDC is, on the one hand, because ETH boasts deep liquidity and hedging opportunities in both mainstream centralized and decentralized trading scenarios, sufficient to absorb tens of millions in sell pressure and transfers without causing extreme slippage; on the other hand, concentrating on stable assets could more easily fall under the scrutiny of compliance agencies and on-chain analytics firms. Once it touches on fiat withdrawal, regulatory pressure would multiply.

From the short-term market perspective, the sudden influx of tens of thousands of ETH buy orders will boost transaction density and order absorption speed within a localized time frame, significantly impacting platforms with relatively thin market depth. Even though the main trading pairs on major exchanges have sufficient depth, such “irrational large-scale buying” could still amplify price volatility on a minute-level, triggering quantitative strategies and high-frequency trading to passively follow. Thus, a black swan originating from a security vulnerability eventually manifests in a technical form of “ETH volume surge during a certain period,” while the true driving force behind the price is the further erosion of systemic trust.

Protocols Emergency Pull the Plug: Trading Suspension and Bloodletting Promises

As the security event spreads on-chain, the project's first reaction is often not to explain but to “pull the plug.” Fluid Protocol clearly stated in its announcement: “The USR market has suspended trading, and the situation has been controlled.” The core signals conveyed by such statements are twofold: firstly, by suspending the related market, they lock potential risks and chain reactions to the smallest possible range; secondly, they communicate to existing participants that “the problem has been identified,” attempting to suppress further runs and panic redemptions.

Subsequently, Fluid added, “If bad debts exist, all user losses will be compensated in full.” This statement's role is not only to soothe the emotions of affected users but also to project a stance of “we have the capability to provide a backup” to the entire market. For DeFi protocols, suspending, rolling back, and compensating have almost become standard maneuvers following security incidents: suspension helps with bloodletting and risk isolation, rollback attempts to restore the state before the attack on a technical level, while compensation serves as economic reparations for parts that cannot be fully repaired technically. However, each method is fraught with huge controversy and execution challenges, from on-chain governance voting to fund sourcing arrangements, every step could provoke renewed distrust.

The more realistic issue is the evident tension between short-term bloodletting measures and long-term brand credibility. Frequent pull-plugs and rollbacks weaken the certainty of “code is law”; if the capacity to honor compensation promises is in doubt, it will further damage the protocol's image of financial robustness. For users, in today’s environment of gradually converging yields, will they still be willing to bear the risks of “counterparties being contract vulnerabilities and governance failures” for a few extra percentage points of APY? This is the key variable that truly determines whether funds will flow back into DeFi after each security incident.

Whales and Hackers Buying ETH in the Same Direction

Almost simultaneously with the hackers' funding path, the traditional “compliant whale” is also quietly increasing its holdings of ETH. The on-chain address 0xC551 has accumulated purchases of 8,662 ETH over the past month, with invested capital around $18.05 million, and its building pace seems more like a systematic bet on medium-term trends rather than short-term speculation. On the other side, a whale holding SKY-related assets has realized approximately $2.72 million in profits, corresponding to a 58% return rate, showing that large inside funds have not chosen a full retreat at this stage but are selectively overweighting assets and timing.

When we overlay these two funding curves with the hackers' ETH exchange path, a strikingly conflicting picture appears: on one side, the security incidents damage protocol trust, while on the other, compliant whales and hacker funds are buying ETH in the same direction on the spot level. From a narrative point of view, this inadvertently strengthens the role of ETH as a “safe haven asset in the crypto world”—when cracks appear at the protocol level, funds retreat from fragile long-tail assets and complex derivative structures, re-converging to the mainstream assets at the foundational level.

This phenomenon has a very nuanced effect on market sentiments. Some participants instinctively amplify the panic, perceiving any security incident as a harbinger of a “systemic risk tipping point,” leading them to reduce positions or even exit; meanwhile, another group of more familiar funds with on-chain gaming logic begin to form a contrarian thinking that “if hackers cause a sale, it is an opportunity to add mainstream assets.” When these two forces repeatedly alternate in the market, price movements often present more complex amplitudes and rhythms than the news headlines suggest.

External Whispers and Shadows: Fraud Scandals and Geopolitical Tensions

Security and trust fissures are not limited to the internal workings of on-chain protocols. As one of the key entry points for fiat deposit, trading platforms and compliance entities also face reputational risks. Recently, the founder of CoinDCX was embroiled in a fraud scandal, subsequently clarifying that the relevant behavior was due to “impersonation,” and he did not directly participate in the event. Regardless of the final legal determination, such news is enough to remind the market: even leading compliant entry points cannot entirely isolate the risks of identity misuse and brand hijacking, causing user sensitivity towards “who I am sending my money to” to heighten.

At a more macro level, geopolitical tensions in the Middle East have re-escalated, with frequent mentions of threats to Iran's critical infrastructure, causing global risk appetite to sway under the multiple pressures of high-interest rates, geopolitical conflicts, and slowing economic growth. In such a context, the day-to-day fluctuations in the crypto market are more easily attributed to various grand narratives by public opinion. However, it's important to emphasize that there is currently insufficient evidence to establish a direct causal chain between any specific political event and daily crypto price volatility; overly weaving narratives may instead detract from attention to the genuine behaviors of on-chain funds.

When on-chain security incidents, controversies over compliance agency reputations, and geopolitical uncertainties overlap, the overall risk perception is amplified, making the market more susceptible to emotional and positional swings driven by a few large inflows and outflows. Attackers converting stolen funds into ETH and whale addresses continually buying ETH—these precisely traceable transaction records participate in price formation far more directly than any macro speculations and more authentically influence participants' next choices.

The Security Fissures Remain Unhealed: Hacker Buy Orders Cannot Conceal Structural Concerns

In conclusion, the events surrounding Venus and Resolv on March 22 have led to a rare approximately $28.56 million passive buy order for ETH, providing short-term support for spot prices and liquidity. However, this “pump” triggered by security failures is essentially another blow to the security foundation of DeFi: the vulnerabilities in the protocols and lack of risk management are the prerequisites for this massive buy order. As long as underlying security fissures are not truly repaired, every unexpected price boost will evolve into a long-term trust drag.

The simultaneous bets on ETH by both whales and hacker funds somewhat reinforce the market narrative that “ETH is a relatively safe asset within the crypto system.” For funds accustomed to rotating on-chain, retreating from complex protocol risk pools to mainstream assets is indeed a relatively rational hedging path. But regardless of how appealing this hedging attribute is articulated, it cannot replace the continued investment in security infrastructure—auditing, offensive and defensive drills, incentive mechanisms, and risk control design are key variables that make the next black swan less likely to occur.

Moving forward, the market needs to pay ongoing attention not only to whether ETH prices can hold their gains after this passive buy order but also to deeper observational clues: how the affected protocols gradually disclose event details, whether they proceed with promised compensations and repairs; whether regulatory agencies will increase scrutiny on DeFi and high-leverage structures after a series of security incidents; and whether ordinary users and institutional funds will choose to migrate to simpler, more conservatively controlled DeFi products or even flow back to centralized or off-chain solutions after each security shock.

For investors, the greatest insights offered by such events are: in the short term, one can prioritize observing the flow of funds and the rhythm of emotional repair, understanding how whale buying and hacker paths jointly shape prices, and that the pace of adding or reducing positions should reference on-chain real behaviors rather than single news headlines; however, regarding long-term allocations, “Has it been sufficiently audited?” “Is the security budget adequate?” “Can the risk control and governance design withstand extreme scenarios?” should become the primary criteria for filtering protocols. Prices can be temporarily boosted by hackers, but trust can only be slowly accumulated through time and rigorous security practices.

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