Rival criticize dYdX for \u201ccentralized\u201d response to market manipulation attacks<\/p>\n
DYdX, a leading decentralized perpetuals exchange, announced it has engaged law enforcement after uncovering the identity of the perpetrator behind alleged market manipulation attacks that transpired in Q4 2023.<\/p>\n
In a Jan. 3 postmortem of the attacks, dYdX said it is in communication with the attacker and is assisting in an ongoing investigation into the incident being carried out by law enforcement.<\/p>\n
\u201cThanks to the efforts of our team, partners in the community, and forensics contractors, investigative results have uncovered the identity of the attacker and we are in contract with them,\u201d dYdX\u00a0said<\/a>. \u201cDYdX is assisting law enforcement in their investigation of this matter and is assessing all legal options. DYdX is committed to taking any legal action it deems appropriate in these circumstances.\u201d<\/p>\n The post also outlines measures taken by the dYdX protocol to protect against future incidents. These include revising the margin thresholds available for \u201cless-liquid\u201d markets, expanding monitoring tracking the open interest of active positions, and restrictions on users\u2019 ability to withdraw unrealized profits in the event of \u201cabnormal activity\u201d on the platform.<\/p>\n <\/p>\n \u201cThese measures will impede other bad actors from trying to use the same strategy to take levered position, manipulate spot prices, withdraw against mark-to-market gains, and repeat,\u201d dYdX asserted.<\/p>\n However, dYdX\u2019s handling of the incident has attracted criticism from its rivals, who decry the project for resorting to\u00a0centralized<\/a>\u00a0tactics.<\/p>\n Adam Cochran, a councilor to Synthetix, the prominent decentralized derivatives protocol, lambasted the measures taken by dYdX in response to the incidents.<\/p>\n \u201cDYdX has in the past 24 hours: auto de-leveraged profitable traders closing their trades, [and] threatened to sue traders for losses incurred from their bad param[eter]s,\u201d Cochran\u00a0said<\/a>. \u201cIf you just buy up an asset that’s illiquid then a lot of jurisdictions don’t consider that to be a problem\u2026 really, the onus is on the system here.\u201d<\/p>\n A French court recently\u00a0dismissed<\/a>\u00a0charges against the perpetrator behind an exploit targeting Platypus Finance, deeming they interacted with publicly available smart contracts according to how they were written.<\/p>\n