Decentralized alternate (DEX) dYdX was pressured to use its insurance fund to cowl $9 million in consumer liquidations on Nov. 17. According to dYdX founder Antonio Juliano, the losses resulted from a “targeted attack” in opposition to the alternate.
Based on studies from the dYdX workforce on X (previously Twitter), the v3 insurance fund was used “to fill gaps on liquidations processes in the YFI market.” The Yearn.finance (YFI) token dropped 43% on Nov. 17 after hovering over 170% in earlier weeks. The sudden worth crash raised concerns within the crypto community a few attainable exit rip-off.
The alleged attack targeted lengthy positions in YFI tokens on the alternate, liquidating positions price almost $38 million. Juliano believes buying and selling losses affecting dYdX, in addition to the sharp decline in YFI, have been brought on by market manipulation:
“This was pretty clearly a targeted attack against dYdX, including market manipulation of the entire $YFI market. We are investigating alongside several partners and will be transparent with what we discover.”
According to Juliano, the v3 insurance fund nonetheless holds $13.5 million, and customers’ funds weren’t affected by the incident. “Even though no user funds were affected, we will also be conducting a thorough review of our risk parameters and making appropriate changes to both v3 and potentially the dYdX Chain software if necessary,” he famous on X.
![](https://s3.cointelegraph.com/uploads/2023-11/0f1a132c-0900-4c07-9d88-7fc08a2f3470.png)
The worthwhile commerce worn out over $300 million in market capitalization from the YFI token, main the neighborhood to elevate eyebrows a few attainable insider job within the YFI market. Some customers claimed that fifty% of the YFI token provide was held in 10 wallets managed by builders. However, Etherscan information suggests a few of these holders are crypto alternate wallets.
Cointelegraph reached out to dYdX and Yearn. finance for feedback however is but to obtain a response.
Magazine: Beyond crypto — Zero-knowledge proofs show potential from voting to finance