The founder of Decentralized finance (DeFi) protocol dYdX, Antonio Juliano, took to X (previously Twitter) to share the findings of the investigation into the lack of $9 million in insurance coverage funds on Nov. 17 in what many suspected was an exit scam.
Juliano famous that the dYdX chain wasn’t compromised, and the insurance coverage claims of $9 million occurred on the v3 chain. The v3 insurance coverage fund was used to fill gaps in liquidation processes within the Yearn.finance (YFI) token market.
The protocol co-founder additionally careworn that dYdX has no plans to barter with the exploiters behind the assault and can as a substitute pay bounties to these most useful in aiding the investigation:
“We will not pay bounties to, or negotiate with the attacker. We and others have made significant progress into identifying the attacker. We are in the process of reporting the information we have to the FBI.”
Juliano added that the exploited v3 chain has central components that may very well be accountable for the compromise. The safety incident triggered the YFI token to drop by 43% on Nov. 17. The sudden value crash raised considerations inside the crypto neighborhood a few doable exit rip-off.
To be very clear: the latest insurance coverage fund incident on dYdX was on v3 and never the dYdX Chain
v3 has central components, dYdX Chain doesn’t. We assist to function v3, we don’t assist to function dYdX Chain. This is vital to know why we have now taken the actions we have now
— Antonio | dYdX (@AntonioMJuliano) November 20, 2023
The exploit focused lengthy positions in YFI tokens on the alternate, liquidating almost $38 million of positions. This was one of many key catalysts behind the worth drop of the YFI token. The trade-in query worn out over $300 million in market capitalization from the YFI token, additional fueling the insider job idea.
Security breaches in DeFi are nothing new; nonetheless, dYdX has taken a novel path by specializing in discovering the offender utilizing the neighborhood moderately than paying a direct bounty to the exploiter.
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