According to Cointelegraph: Antonio Juliano, the founder of decentralized finance (DeFi) protocol dYdX, has unveiled preliminary findings from an investigation into the loss of $9 million worth of insurance funds. The incident, which occurred on November 17, led to widespread suspicion of an exit scam.
Juliano claimed that the core dYdX chain was unharmed in the exploit, and the $9 million insurance fund claims occurred on the v3 chain. This specific fund existed to buffer liquidation processes in the YFI market.
Unlike the customary practice, dYdX has no intention of negotiating any form of settlement with the attacker or paying out bounties. Instead, they plan to reward individuals who make considerable contributions to the ongoing investigation.
Juliano stated, "We will not pay bounties to, or negotiate with, the attacker. We have made significant progress in identifying the attacker along with others. We are in the process of reporting our findings to the FBI.”
In a significant reveal, the founder suggested that potentially culpable central components might have been the cause of the v3 chain exploitation. This security lapse led to Yearn.finance tokens experiencing a dramatic 43% fall on November 17, sparking concerns within the crypto community over a potential exit scam.
The exploit executed on November 17 focused on YFI tokens' long positions on the exchange, liquidating almost $38 million worth of positions and setting off a drastic price drop. The problematic trade erased over $300 million in market capitalization from the YFI token, thus bolstering theories of an inside job.
While security breaches in the DeFi sphere are not uncommon, the dYdX case stands out as it leverages community assistance to track down the perpetrator, in contrast to offering a direct bounty to the perpetrators.
