Decentralized exchange dYdX took a $9 million hit to its insurance fund, representing about 40% of the total, following liquidations on the Yearn Finance (YFI) market, the platform announced on X.
The platform also stated that the insurance fund remains “well funded” with $13.5 million remaining. Up websitedYdX explains that its insurance fund, designed to intervene when an account has a negative balance, “is not decentralized and the dYdX team will be directly responsible for deposits into and withdrawals from the fund.”
In a sequel afterAntonio Juliano, CEO of dYdX, called the event “quite clearly a targeted attack on dYdX” involving “market manipulation of the entire $YFI market” and said the platform was investigating the incident “together with several partners” and assessing the risk parameters assessed. that control the v3 platform. Juliano and dYdX did not immediately respond to requests for additional comment.
Arkham Intelligence noted in a after on Arkham stated that YFI normally trades “very infrequently” on dYdX, but in recent days it has seen the platform make up almost half of YFI’s total Open Interest.
As a first step against a future incident, dYdX increased margin requirements for “less liquid” markets, including EOS, RUNE, AAVE and others.
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