dYdX raises margin requirements in some markets, bans “highly profitable trades”


Decentralized crypto alternate dYdX has disclosed new measures to mitigate trading-related dangers after burning $9 million of its insurance fund on Nov. 17 to cowl customers’ losses.

In accordance with an announcement on X (previously Twitter), the alternate elevated margin necessities on a number of “much less liquid markets,” affecting tokens similar to Eos (EOS), 0x Protocol (ZRX), Aave (AAVE), Algorand (ALGO), Web Laptop (ICP), Monero (XRM), Tezos (XTZ), Zcash (ZEC), SushiSwap (SUSHI), THORChain (RUNE), Synthetix (SNX), Enjin (ENJ), 1inch Community (1INCH), Celo (CELO), Yearn.finance (YFI), and Uma (UMA).

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dYdX triggered its insurance coverage fund to cowl customers’ buying and selling losses on Nov. 17 after a worthwhile commerce focusing on lengthy positions on the YFI token brought on the liquidation of positions value practically $38 million.

dYdX founder Antonio Juliano dubbed the transfer a “focused assault” on the alternate. In accordance with him, YFI’s open curiosity in dYdX spiked from $0.8 million to $67 million in a matter of days on account of the actions of 1 particular person. The identical particular person, in accordance with Juliano, tried to assault the SUSHI market on dYdX a couple of weeks earlier.

“We did take motion to extend preliminary margin ratios for $YFI previous to the worth crash, however this was in the end not adequate. The actor was capable of withdraw a superb quantity of $USDC from dYdX proper earlier than the worth crash,” he wrote.

On X, the alternate’s staff mentioned that “extremely worthwhile buying and selling methods have now been banned on dYdX,” in a reference to the language used by Mango Markets’ exploiter Avraham Eisenberg in his $116 million assault of 2022.

dYdX is now providing a bounty fee in alternate for useful data:

The YFI token declined by 43% in just a few hours on Nov. 17 after hovering over 170% in November. The sharp decline worn out over $300 million in market capitalization from the current features, according to knowledge from CoinMarketCap. Previously 30 days, nonetheless, the token has nonetheless gained over 90%, buying and selling at $9,190 on the time of writing.

The Yearn.finance staff hasn’t disclosed any official particulars in regards to the incident. A supply acquainted with the matter advised Cointelegraph that builders on the staff don’t management nearly all of the token provide, strongly refuting preliminary considerations a few potential rip-off. The declare is supported by Etherscan knowledge showing giant centralized exchanges as YFI prime holders.

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