dYdX founder blames V3 central components for ‘targeted attack,’ involves FBI

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

Juliano famous that the precise dYdX chain wasn’t compromised, and the insurance coverage claims of $9 million came about 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 pressured 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 vital progress into figuring out the attacker. We’re within the strategy of reporting the data we’ve got to the FBI.”

Juliano added that the v3 chain that was exploited has central elements that may very well be one of many potential causes behind the compromise. The safety incident precipitated the Yearn.finance token to drop by 43% on Nov. 17. The sudden worth crash raised issues inside the crypto group a couple of potential exit rip-off.

To be very clear: the current 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 vital to know why we’ve got taken the actions we’ve got

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

The exploit on Nov. 17 focused lengthy positions in YFI tokens on the alternate, liquidating positions value practically $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 wrongdoer utilizing the group fairly than paying a direct bounty to the exploiters.

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