- The attack on dYdX came as a result of targeting YFI’s long positions.
- $9 million has been used to cover funds lost in the attack.
dYdX [DYDX], a decentralized exchange (DEX), was recently targeted in an attack. As a result, the exchange had to use a substantial portion of its insurance funds to cover costs.
The incident also had a detrimental effect on Yearn Finance [YFI].
dYdX suffers attack through Yearn Finance token
According to Antonio Juliano, the founder of dYdX, the attack came from the platform’s Open Interest in Yearn Finance. The OI rose from less than $1 million to around $67 million. Also, he confirmed that the objective of the attack was to target long positions in YFI tokens.
The attack resulted in the liquidation of positions valued at nearly $38 million.
Furthermore, Juliano suggested that the trading losses incurred and the significant decline in YFI were due to market manipulation. Notably, he reassured users that no user funds were lost during the incident.
To address the loss resulting from liquidations in the YFI token market, the team used $9 million from the dYdX v3 insurance fund. But despite tapping into 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 around 33.4% in value on the 18th of November.
Additionally, an analysis of Santiment’s volume metric showed a dominance of sell pressure, with a rise to over $492 million. As of press time, YFI was trading at around $9,100, reflecting an additional decline of 5%.
DYDX also experienced a price decrease of 5% at the close of trading on the 18th of November. However, a partial recovery was noted at the time of the report, with the trading position showing a slight 2% price increase.
Read dYdX’s [DYDX] Price Prediction 2023-24
How dYdX’s TVL fared
An examination of the exchange’s Total Value Locked (TVL) revealed a peak of around $415 million on the 17th of November, reaching its highest level in recent months. However, a notable downturn has occurred since then, with the TVL decreasing to around $375 million as of press time.
This fall signified a reduction in the total value of assets locked on the platform. The reduction could be due to either liquidity leaving the exchange or a decrease in the assets’ value.