dYdX’s insurance fund lost $9 million as a result of ‘targeted attack’: CEO
Decentralized exchange dYdX took a $9 million hit to its insurance fund, representing around 40% of its total, following liquidations in the Yearn Finance (YFI) market, the platform announced on X.
The platform also stated the insurance fund remains “well funded” with $13.5 million remaining. On its website, dYdX explains that its insurance fund, designed to step in when an account has a negative balance, “is not decentralized, and the dYdX team will be directly responsible for deposits to and withdrawals from the fund.”
In a follow-up post, dYdX CEO Antonio Juliano called the event “pretty clearly a targeted attack against dYdX” that involved “market manipulation of the entire $YFI market” and said the platform was investigating the incident “alongside several partners,” as well as reviewing the risk parameters that govern the v3 platform. Juliano and dYdX did not immediately respond to requests for additional comments.
Arkham Intelligence noted in a post on X that amidst yesterday’s dramatic 40% price crash in YFI, $50 million in YFI Open Interest — or unsettled contracts — was wiped out. Arkham stated that normally, YFI is “very rarely traded” on dYdX, yet the past few days saw the platform make up almost half of YFI’s overall Open Interest.
As a first step against a future incident, dYdX increased margin requirements for “less liquid” markets including EOS, RUNE, AAVE, and others.
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