Crypto News

dYdX Founder Claims Targeted Attack Led to $9 Million Insurance Claim

Decentralized exchange (DEX) dYdX was forced to use its insurance fund to cover $9 million in user liquidations on November 17. According to For dYdX founder Antonio Juliano, the losses were the result of a “targeted attack” against the stock market.

According to reports from the dYdX team on The Yearn.Finance (YFI) token fell 43% on November 17 after soaring over 170% in the previous weeks. The sudden price drop has raised concerns within the crypto community regarding a possible exit scam.

The alleged attack targeted long positions in YFI tokens on the exchange, liquidating positions worth nearly $38 million. Juliano believes that the trading losses affecting dYdX, as well as the sharp drop in YFI, were caused by market manipulation:

“This was clearly a targeted attack on dYdX, including market manipulation of the entire market. $YFI walk. We are investigating alongside several partners and will be transparent about what we discover. »

According to Juliano, the v3 insurance fund still holds $13.5 million and user funds were not affected by the incident. “Even though no user funds have been allocated, we will also conduct a thorough review of our risk settings and make appropriate changes to both v3 and potentially the dYdX Chain software as necessary,” he said. -he noted on X.

Balance changes on the dYdX insurance portfolio. Source: DYDX Explorer

This profitable transaction wiped out over $300 million in market capitalization of the YFI token, leading the community to wonder about possible insider work in the YFI market. Some users claimed that 50% of the YFI token supply was held in 10 developer-controlled wallets. However, data from Etherscan suggests that some of these holders are cryptocurrency exchange wallets.

Cointelegraph has contacted the teams at dYdX and Yearn.Finance for comment and is awaiting a response.

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