dYdX

On November 17, 2023, dYdX, a decentralized exchange (DEX) on Ethereum, was targeted in a sophisticated exploit, losing $9 million from its v3 insurance fund, as detailed in its January 3, 2024, post-mortem.

Detected at 14:00 UTC, the attacker manipulated the Yearn.finance (YFI) market, taking long positions on YFI tokens, triggering liquidations worth $38 million, and causing a 43% YFI price drop, per Twitter (@dYdX). The hacker exploited the fund used to cover liquidation gaps, draining assets to an address (0x0c…), per Etherscan. dYdX, with $300 million daily trading volume per DeFiLlama, halted affected markets, implemented dynamic margin adjustments, and enhanced open-interest monitoring to prevent recurrence, per the article.

No user funds were directly impacted, and the protocol identified the attacker by January 2024, aiding law enforcement and exploring legal action, per Reddit (r/DeFi). No funds were recovered, but v4 upgrades bolstered security, per the article. Like CoinSpot’s $2.4 million hack, this incident reveals DeFi’s vulnerability to targeted attacks.

dYdX’s rapid response and pursuit of justice weave a tale of defiance, transforming a calculated heist into a rallying cry for stronger defenses in the high-stakes arena of decentralized finance.