dYdX founder V3 blames central units for ‘targeted attack’, includes FBI

Antonio Giuliano, founder of decentralized finance (DeFi) protocol dYdX, took to X (formerly Twitter) to share some of his findings on a $9 million insurance fund loss that many suspected was a withdrawal scam in November. 17.

Giuliano stated that the actual dYdX chain was not compromised, and the $9 million insurance claim occurred on the v3 chain. The v3 insurance fund was used to fill liquidity gaps in the YFI market.

DIDX, the protocol's co-founder, stressed that it has no plans to negotiate with the exploiters behind the attack and will instead pay a bounty to those who help with the investigation.

We do not pay or negotiate with the attacker. We and others have made significant progress in identifying the attacker. We are in the process of reporting the information we have to the FBI.

Giuliano added that the exploited v3 chain has central components that could be one of the reasons behind the deal. The security incident caused the Yearn.finance token to drop by 43% in November.

To be very clear: the recent insurance fund incident on DIDX was on v3, not the DIDX chain.

v3 has centerpieces, dYdX has no chains. We help make v3, we don't help make dYdX Chain. This is important to understand why we take the actions that we do

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

In the year The November 17 exploit targeted long positions on the YFI Tokens exchange, which drained nearly $38 million of positions. This was one of the key motivations behind the YFI token price drop. The trade-in has further fueled the insider job theory, wiping out more than $300 million in market capitalization from the YFI token.

Security breaches in DeFi are not new. But this event is different because dYdX focuses on using the community to find the culprit instead of paying direct bounties to exploiters.

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