Key Takeaways:
- dYdX v3 website was compromised, users to avoid interactions with the site due to phishing risks.
- dYdX is reportedly in talks to sell its v3 software to major crypto market makers
Decentralized exchange dYdX is grappling with both a security crisis and a significant business opportunity. The platform’s v3 website has been compromised, prompting urgent safety warnings for users.
At the same time, reports suggest that dYdX is in discussions to sell its v3 software to a consortium of major crypto market makers.
The security breach specifically targets the dYdX v3 website, an older version of the platform that manages roughly $1.5 billion in weekly derivatives trading volume.
The dYdX team confirmed the breach on Twitter, noting that the attack was limited to the front end and did not affect traders’ funds or the underlying smart contracts. However, users were cautioned against clicking on any URLs, as phishing links quickly began appearing in comments following the announcement.
In an interesting coincidence, the official dYdX page on X posted about the v3 interface compromise shortly after Bloomberg reported on the potential sale. The platform’s v3 domain (dydx.exchange) was taken over by an attacker who deployed a copycat website designed to steal users’ tokens through a malicious PERMIT2 transaction.
Despite this, the larger dYdX v4 venue, which recently saw $6 billion in trading volume, remains unaffected.
This security incident is not the first technical challenge faced by dYdX. In April, the platform experienced a significant outage lasting over nine hours due to complications from a scheduled upgrade to version 4 of the chain.
The potential sale of dYdX v3 software marks a rare M&A event in the DeFi sector, where open-source software is typically the norm. Interested buyers reportedly include major market maker Wintermute. As the situation unfolds, the crypto community is eagerly awaiting further updates on both the security compromise and the potential software sale.
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dYdX, which offers decentralized derivatives with higher liquidity and lower slippage, currently contains $417 million in total value locked, according to DeFiLlama. The platform’s ability to navigate these challenges will be crucial as the decentralized exchanged is dealing with double-edged problems.