dYdX Founder Addresses $9 Million Loss, Denies Exit Scam Allegations
Key Findings and Assurance
Juliano clarified that the dYdX chain itself remained uncompromised, emphasizing that the incident occurred on the v3 chain where the insurance claims took place. The v3 insurance fund was utilized to address gaps in liquidation processes within the YFI market.
He affirmed dYdX's stance of not negotiating with the attackers, opting instead to offer bounties to those aiding the investigation. Juliano stated, “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.”
Concerns Over Central Components
Juliano pointed out that the v3 chain, which was exploited, contains central components that might be a contributing factor to the compromise. The incident led to a 43% drop in the Yearn.finance token on Nov. 17, triggering concerns of a potential exit scam.
Exploit Targeting YFI Tokens
The exploit specifically targeted long positions in YFI tokens on the exchange, resulting in the liquidation of positions valued at nearly $38 million. This event played a significant role in the YFI token's price drop, wiping out over $300 million in market capitalization and fueling suspicions of an insider job.
While security breaches in DeFi are not uncommon, dYdX's approach to this incident stands out. Instead of directly paying bounties to the exploiters, the protocol is actively involving the community in identifying the culprits, marking a distinct strategy in addressing security incidents within the DeFi space.