dYdX founder blames V3 central elements for ‘focused assault,’ entails FBI

Decentralized finance (DeFi) protocol dYdX founder Antonio Juliano took to X (previously Twitter) to share a few of the findings of the investigation into the lack of $9 million in insurance coverage funds, in what many suspected was an exit scam that took place on Nov. 17.

Juliano famous that the precise dYdX chain wasn’t compromised, and the insurance coverage claims of $9 million happened on the v3 chain. The v3 insurance coverage fund was used to fill gaps in liquidation processes within the YFI market.

The protocol co-founder additionally confused that dYdX has no plans to barter with the exploiters behind the assault and can as an alternative pay bounties to these most useful in aiding the investigation:

“We won’t pay bounties to, or negotiate with the attacker. We and others have made important progress into figuring out the attacker. We’re within the means of reporting the knowledge we now have to the FBI.”

Juliano added that the v3 chain that was exploited has central elements that could possibly be one of many potential causes behind the compromise. The safety incident brought on the Yearn.finance token to drop by 43% on Nov. 17. The sudden worth crash raised considerations throughout the crypto neighborhood a couple of attainable 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 elements, dYdX Chain doesn’t. We assist to function v3, we don’t assist to function dYdX Chain. That is necessary to grasp why we now have taken the actions we now have

— Antonio | dYdX (@AntonioMJuliano) November 20, 2023

The exploit on Nov. 17 focused lengthy positions in YFI tokens on the trade, liquidating positions price almost $38 million. This was one of many key catalysts behind the value 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.

Safety breaches in DeFi are nothing new. Nevertheless, this incident is totally different as a result of dYdX is concentrated on discovering the perpetrator utilizing the neighborhood relatively than paying a direct bounty to the exploiters.

Journal: Past crypto — Zero-knowledge proofs present potential from voting to finance