Journalist
Posted:
- The attack on dYdX came as a result of attacking YFI’s long positions.
- $9 million has been used to cover the money lost in the attack.
dYdX [DYDX], a decentralized exchange (DEX), was recently the target of an attack. As a result, the exchange had to use a significant portion of its insurance funds to cover costs.
The incident also had an adverse effect on Yearn Finance [YFI].
dYdX is being attacked via the Yearn Finance token
According to Antonio Julianothe founder of dYdX, the attack came from the platform’s Open Interest in Yearn Finance. The OI increased from less than $1 million to approximately $67 million. He also confirmed that the aim of the attack was to target long positions in YFI tokens.
The attack resulted in the liquidation of positions worth nearly $38 million.
Moreover, Juliano suggested that the incurred trading losses and the significant drop in the YFI were the result of market manipulation. Notably, he assured users that no user funds were lost during the incident.
To address the loss due to liquidations in the YFI token market, the team used $9 million from the dYdX v3 insurance fund. But despite tapping the insurance funds, a loss of $13.5 million remained.
DYDX and YFI suffer declines
Both YFI and DYDX experienced negative reactions as a result of these hacks. AMBCrypto’s analysis of the daily timeframe chart revealed a significant decline for YFI, with a loss of value of approximately 33.4% on November 18.
Additionally, an analysis of Santiment’s volume metric showed that selling pressure dominated, rising to over $492 million. At the time of writing, YFI was trading around $9,100, reflecting an additional 5% decline.
Source: TradingView
DYDX also saw a 5% price drop at the end of trading on November 18. However, at the time of the report, a partial recovery was noted, with the trading position showing a slight price increase of 2%.
Source: TradingView
Read dYdXs [DYDX] Price prediction 2023-24
How dYdX’s TVL did
A survey of the exchange’s Total Value Locked (TVL) revealed a peak of around $415 million on November 17, reaching the highest level in recent months. However, there has been a notable downturn since then, with TVL falling to around $375 million at the time of writing.
This drop meant a reduction in the total value of assets locked on the platform. The drop could be the result of liquidity leaving the stock exchange, or a decline in the value of the assets.
