On November 17, approximately $9 million from decentralized derivatives exchange dYdX’s insurance fund was used to cover liquidations of users’ positions in the Yearn Finance (YFI) token market.
Last night about $9m from the dYdX v3 insurance fund were used to fill gaps on liquidations processed in the YFI market. The v3 insurance fund remains well funded with $13.5m in funds remaining
No user funds were affected and our team is working to investigate the event
— dYdX (@dYdX) November 18, 2023
The team assured that the fund with a balance of $13.5 million is “still well funded,” user funds were not affected, and the incident is being investigated.
According to dYdX founder and CEO Antonio Giuliano, the losses resulted from a “targeted attack” on the exchange, which included “manipulation of the entire YFI market.”
The team assured that the fund with a balance of $13.5 million is “still well funded,” user funds were not affected, and the incident is being investigated.
According to dYdX founder and CEO Antonio Giuliano, the losses resulted from a “targeted attack” on the exchange, which included “manipulation of the entire YFI market.”
Arkham Intelligence specialists noted that the YFI price drop of approximately 40% that occurred the day before led to the liquidation of positions on dYdX in the amount of $50 million.
Experts noted that YFI is usually traded very rarely on dYdX, but the sharp price surge over the past few days has led to open interest peaking at $60 million. The value was half of the total for the asset.
Giuliano confirmed these data in a message. According to him, the attack was carried out by “well-capitalized entities” with the aim of siphoning funds from the insurance fund. Two weeks ago, a similar attempt was made to manipulate the SUSHI market, this time they managed to withdraw a significant amount in USDC before the price collapse, the head of the exchange clarified.
As a measure against potential future incidents, the dYdX team increased initial margin requirements for a number of low-liquid tokens like EOS, RUNE, AAVE and YFI.
Source: Cryptocurrency
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