Decentralized Exchange dYdX Releases Post-mortem Report on November Attack

dYdX, a decentralized exchange, has released a post-mortem report on a “targeted attack” on its v3 platform in November, resulting in a $9 million loss in its insurance fund, which accounted for about 40% of its total. The exchange has identified the attacker and is exploring legal options.

The attacker opened multiple 5x leveraged long positions in YFI-USD through over 100 wallets, causing YFI’s price to surge by 215%.

They continued to increase their positions using different addresses, reaching a maximum of $50 million. In response, dYdX raised the initial margin requirement for YFI-USD and reduced the base and incremental position sizes.

However, on Nov. 17, YFI’s price experienced a sudden drop of nearly 30%, leading to the attacker’s inability to close their positions and resulting in negative holdings. The insurance fund automatically compensated for the attacker’s losses.