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The saga surrounding the recent market manipulation attack targeting dYdX, the leading decentralized perpetuals exchange, continues to unfold, with the dYdX team copping flak from decentralization devotees.<\/p>\n
On Nov. 19, dYdX founder, Antonio Juliano, tweeted<\/a> that the project will pay out bounties to sleuths helping to uncover the identity of the culprit behind an alleged Nov. 18 market manipulation attack<\/a>.<\/p>\n The incident resulted in violent YFI liquidations and a $9M shortfall incurred by the dYdX protocol. However, the project mobilized assets from its insurance fund to cover losses and ensure no users were impacted.<\/p>\n Juliano added that dYdX has made \u201csignificant progress into identifying the attacker\u201d and that the team is in the process of reporting the information to the U.S. Federal Bureau of Investigation (FBI). The insurance fund still holds $13.5M worth of assets after covering the recent shortfall.<\/p>\n <\/a><\/p>\n The DYDX token is down 15% in the past 48 hours to last change hands for $3.26, according to CoinGecko.<\/p>\n DYdX has attracted criticism for how it has handled the incident, with onlookers accusing the project of showcasing centralization in its response to the attack.<\/p>\n \u201cDYdX has never really been decentralized, it runs like a [San Francisco-based] fintech startup,\u201d tweeted<\/a> Kain Warwick, the founder of Synthetix. \u201cDecentralized tech is catching up and it is hard to pivot a culture of top-down hierarchical decision-making processes.\u201d<\/p>\n \u201cOn dYdX, if you trade too profitably, the devs put a bounty on your head and report you to the FBI,\u201d said<\/a> Twitter user, Captain C2.<\/p>\n Juliano replied<\/a> that there is \u201csignificant evidence\u201d indicating the trader was engaged in market manipulation. \u201cThat is different than trading profitably as per laws in basically all jurisdictions,\u201d he added.<\/p>\n The market manipulation drama served as a dampener on dYdX\u2019s recent impressive rally.<\/p>\n As of Nov. 16, the DYDX token had rallied 60%<\/a> in one week and more than 100% in 30 days following the project\u2019s migration<\/a> from a dedicated Ethereum Layer 2 to dYdX Chain \u2014 a Cosmos-based appchain.<\/p>\n