On November 17th, an unknown individual who may have been working as part of a team targeted the dYdX exchange and its YFI token.
Allegedly, the same actor previously tried a similar strategy in the SUSHI market on the exchange 2 weeks ago.
Good trades or Harmful intentions?
These trades, classified by the platform’s staff as an attack, were made using a series of transactions that ultimately caused the exchange’s open interest to soar to over $66 million and resulted in $9 million its insurance fund burned to keep it going. floating.
Fortunately, there are no user funds affected through trade.
“Last night about $9m from the dYdX v3 insurance fund was used to fill the gaps in the liquidations processed in the YFI market. The v3 insurance fund remains well funded with $13.5m of funds remaining. No user funds were affected and our team is working to investigate the incident.
However, containment measures have been implemented to prevent further attacks. Until further notice, initial margin requirements for trades in “less liquid” tokens will increase.
As an immediate measure, we have increased the initial margin requirements for less liquid markets:$EOS, $ZRX, $ ULTO, $ ALGO, $ICP, $XMR, $XTZ, $ZEC, $ SUSHI, $RUNES, $SNX, $ENJ$1 INCH, $TIBO, $OVER, $A, $ SUSHI
We will continue to monitor, but believe this is an important first…
— dYdX (@dYdX) November 18, 2023
Meanwhile, the search for the person – or group behind the trade continues.
dYdX treats the Event as an Attack
The discussion of the debacle of Mango Markets is due to a series of trades targeting high positions on the exchange, which is considered an attack on the owners of the platform.
The Founder of dYdX, Antonio M. Juliano, stated that his team has turned over their author information to the FBI. Additionally, Juliano stated that any rewards given will be given to reward community members who helped track down the alleged attacker.
No whitehat olive branch will be extended to the attacker – assuming law enforcement will side with dYdX and treat the trades as illegal. Avraham Eisenberg, who implemented a similar “trading strategy” against Mango Markets, has been accused of criminal offenses – however, his trial has been postponed, and it is unclear whether the government will side with the platform.
Meanwhile, dYdX – in their own words – bans all the most profitable trading strategies on the platform.
Sorry, the most profitable trading strategies are now banned on dYdX
— dYdX (@dYdX) November 18, 2023
Although the sense of humor displayed by the site’s PR team is important, one must now consider how profitable a business is before closing his account.
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