On the 17th of November, 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 had previously tried a similar strategy on the exchange’s SUSHI market merely 2 weeks prior.

Good Trades Or Malicious Intent?

These trades, which the platform’s staff have classified as an attack, were done using a series of transactions that ultimately caused open interest on the exchange to surge by over $66 million and resulted in $9 million of its insurance fund being burned in order to keep it afloat.

Thankfully, no user funds were affected by the trade.

“Last night about $9m from the dYdX v3 insurance fund were used to fill gaps on liquidations processed in the YFI market. The v3 insurance fund remains well funded with $13.5m in funds remaining. No user funds were affected and our team is working to investigate the event.”

However, stopgap measures have since been implemented to prevent further attacks. Until further notice, initial margin requirements for trades of “less liquid” tokens will increase.

As an immediate measure, we have increased initial margin requirements for less liquid markets:$EOS, $ZRX, $AAVE, $ALGO, $ICP, $XMR, $XTZ,