Increased privacy and individual currency sovereignty are some of the key advantages that have made DEXs so popular in recent times. Unfortunately, using a DEX comes with a host of security risks.
dYdX avoids an accident
Currently, the decentralized exchange dYdX is very hot, although there is no exact reason. It is a non-custody decentralized exchange that allows users to transact through Ethereum smart contracts. Just recently, daily trading volume rose to nearly $10 billion on the platform, surpassing the daily volume of Coinbase and Uniswap.
However, a new development could affect this impressive increase. According to the news, the protocol has just resolved a security hole before it can be exploited. The team also discussed this in a tweet thread.
The dYdX team warned people about the security issue in a newly deployed smart contract. One of the aforementioned tweets said:
“At 05:21 UTC today the dYdX team was alerted of a security issue with a newly deployed smart contract. If you have set allowance to deposit to https://t.co/1WbZbCpiuX since Wednesday 11/24 read for important recovery information. No funds were lost and all funds are safe”.
At 05:21 UTC today the dYdX team was alerted of a security issue with a newly deployed smart contract
❗If you have set allowance to deposit to https://t.co/1WbZbCpiuX since Wednesday 11/24 read for important recovery information❗
NO FUNDS WERE LOST AND ALL FUNDS ARE SAFE ?
— dYdX ? (@dydxprotocol) November 27, 2021
Meanwhile, the team also alerted:
“All users who have set allowance to deposit since Wednesday, 24 November, are advised to visit the exchange and recover the funds as soon as possible. Your funds are not at risk but must be moved back to your wallet.”
The recovery process was coordinated with someone named Samczsun and the dYdX team, through which all potentially damaged funds were saved.
samczsun saves the day again pic.twitter.com/eozlcDnRZf
— banteg (@bantg) November 27, 2021
During the White Hat recovery, affected funds in 700 accounts (about $2 million) were redirected to escrow smart contracts. These funds are from accounts that cannot deposit to dYdX. However, to maintain security, only the user’s wallet has access to withdraw funds.
The protocol’s operators also advised users to avoid transferring funds until the team asks to do so.
Other users who do not allow deposits to the dYdX Layer 2 Perpetuals product are not affected.
In the meantime, gas-less deposits and the 0x swap integration were disabled until further notice.
At the time of writing, DYDX is trading in the red zone, falling below $13 with a near 7% correction over the past 24 hours.
Source: Tradingview
Read more:
- DYdX Recorded Daily Trading Volume Flipping Uniswap And Coinbase
- DYdX Transaction Volume Reached $4.28 Billion, Surpassing Coinbase, DYDX Price Hits New ATH