dYdX Levies Margin Requirement Hike Amidst Highly Profitable Trade Bans Following Alleged Attack
According to Cointelegraph: Decentralized cryptocurrency exchange dYdX has issued stricter trading measures after expending $9 million from its insurance fund on Nov 17 to offset user losses. This step was taken following an alleged targeted assault on the YFI token, which led to massive liquidations.
According to an official announcement, the exchange has uplifted margin requirements on several 'less liquid markets,' affecting tokens such as Eos, 0x Protocol (ZRX), Aave, Algorand, Internet Computer, Monero (XRM), Tezos, Zcash, SushiSwap, THORChain, Synthetix, Enjin, 1inch Network, Celo, Yearn.finance, and Uma.
The expansion of the insurance fund became necessary after an advantageous trade targeting YFI's extended positions engendered the liquidation of positions worth almost $38 million. The founder of dYdX, Antonio Juliano, labeled the development a "targeted attack" against the exchange. He added that YFI's open interest in dYdX had surged from $0.8 million to $67 million within a few days, instigated by a single entity's actions.
The same entity reportedly had attempted an attack on dYdX's SUSHI market several weeks earlier. "Highly profitable trading strategies have now been prohibited on dYdX,” said the exchange’s team.
Despite a 43% drop on Nov. 17, the price of YFI token continues to perform well overall, recording a gain of over 90% in the last 30 days. Yearn.finance has yet to reveal official details about the incident. Earlier concerns about a possible scam were counteracted by evidence showing substantial centralized exchanges as YFI's top holders on Etherscan.