dYdX’s founder Antonio Juliano has indicated that the decentralized exchange platform and the Yearn. Finance (YFI) tokens were targeted in an attack.
On November 17, as a result of this attack, the dYdX platform had to use its insurance fund when it was forced to cover $9 million worth of user liquidations. Juliano stated that this situation was the result of a deliberate attack on the platform.
According to reports published on Twitter, the v3 insurance fund was used to “fill in the gaps in the liquidation processes within the YFI market.” The Yearn. Finance (YFI) token, which had risen around 170% in recent weeks, lost 43% of its value on November 17. This unexpected drop in value sparked concerns about exit scams in the crypto community.
According to allegations, the attack liquidated about $38 million positions by targeting the long positions of YFI tokens on the exchange. dYdX’s founder Antonio Juliano stated that the significant decrease in YFI and the trading losses affecting the exchange were due to market manipulation:
“In our view, this was a definite targeted attack against dYdX comes with market manipulation,” and added, “We are investigating the situation with several of our partners and will be transparent about what we find.”
According to Juliano, there is still $13.5 million in the v3 insurance fund, and user accounts were not affected by this incident. In a statement on Twitter, Juliano stated, “Although user funds have not been affected, we will carefully review our risk parameters and make appropriate changes to v3 and potentially dYdX Chain software if necessary.”