- Critic Adam Cochran criticizes dYdX for failing to adopt proper risk management following a $9 million hack
- dYdX offers bounties for information on the $9 million hack but refuses to negotiate with the attackers
- dYdX founder suspects the hack was a targeted attack and seeks FBI involvement
Prominent crypto critic Adam Cochran has faulted the recently exploited decentralized protocol, dYdX, for failing to adopt proper risk management following a hack where $9 million in insurance funds was carted away.
In the critical comment to dYdX, Cochran drew parallels with Synthetix, a similar platform providing tools for derivatives trading in DeFi. Specifically, he pointed out Synthetix’s mechanism for handling profitable trading and managing risk.
Cochran noted that on Synthetix, users can earn money through highly profitable trading, but the interest rate will also rise. However, when a user attempts to execute a manipulated bid on an illiquid asset with a staggering sum, Synthetix’s risk management protocol kicks in to prevent potential damage to the system.
Cochran concluded the tweet, stating, “It’d be dumb to not manage risk,” with a disapproval gesture at the dYdX team.
Notably, Cochran’s critical comment follows a request from Antonio Juliano, the founder of dYdX, regarding the exploit on the platform. Juliano revealed that the team has commenced an investigation into an attack. Therefore, dYdX is offering bounties to individuals who provide the most helpful information to aid the investigations.
Meanwhile, the dYdX founder boldly asserted that the team would neither pay bounties to the attacker nor engage in negotiation. Furthermore, Juliano stated that the dYdX team and other collaborators have made substantial advancements in identifying the perpetrator. He added that they are in the process of reporting the gathered information to the Federal Bureau of Investigation (FBI).
Notably, dYdX suffered a significant security breach that resulted in a substantial $9 million loss over the weekend. Juliano has characterized the event as a targeted attack against the platform.
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Source: https://coinedition.com/dydx-faces-backlash-for-risk-management-failures-amid-9m-hack/