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Ethereum-based DYdX Saved From $ 2 Million Security Flaw Thanks To White Hat Heroism

Security-enhanced privacy and personal monetary sovereignty are some of the major benefits that have seen the popularity of decentralized exchanges (DEX) skyrocket in recent history. Unfortunately, using DEX comes with its own set of security risks.

dYdX in the fray

Today, the decentralized crypto exchange dYdX is all the rage, but not for exactly the right reasons. It is a decentralized, non-custodial exchange that allows users to take advantage of trading through Ethereum smart contracts. Most recently, its daily trading volume reached nearly $ 10 billion on the platform, surpassing the daily volumes of Coinbase and Uniswap.

However, one development might just affect this impressive increase. The protocol is in the news today after addressing a security vulnerability before it could be exploited. The team discussed the same in a series of tweets.

The dYdX team alerted people to a security issue with a newly deployed smart contract. One of the aforementioned tweets noted,

Meanwhile, the team also alerted users by declaring,

“All users who have defined a deposit authorization since Wednesday, November 24 are invited to go to the exchange and collect the funds as soon as possible. Your funds are not at risk but must be returned to your wallet.

The white hat recovery was carried out in collaboration with a man named Samczsun and the dYdX team, thanks to which all potentially vulnerable funds were saved.

Source: Twitter

Now on the issue of earmarked funds i.e. 700 accounts (roughly $ 2 million) have been diverted to an escrow smart contract as part of the White Hat Recovery. These funds included accounts that were not deposited with dYdX. However, to maintain security, only the user’s wallet had access to collect the funds.

“No money lost”

Protocol officials further advised users (who set an allowance for depositing funds) to avoid transferring funds until the team requests it.

Other users who have not set any deposit allowance on the dYdX Layer 2 Perpetuals product have not been affected by the aforementioned developments.

In the meantime, the gasless depots and the integration of the 0x swap have been deactivated until further notice. The team concluded,

“A longer tweet with more information will follow shortly once affected users have a chance to recover. A full crash report will be posted shortly thereafter.”

At the time of writing, the flagship token was trading in the red zone, below $ 13 with a 7% correction over the past 24 hours.

A similar impact on the price of alt was also seen earlier in August.

Note: This is a developing news item and the article will be updated accordingly …