DeFi exchange dYdX is the latest DeFi project whose website has been compromised.
On Tuesday, the DeFi perpetual exchange reported that the web front end for its v3 protocol was compromised and warned users not to use the site.
Meanwhile, dYdX is reportedly in talks to sell the software for its v3 protocol to a consortium of major crypto market makers.
The dYdX v3 software is the set of smart contracts that control the v3 of the protocol; the front end is the website users can visit to trade.
Savvy DeFi users can also interact with the v3 smart contract directly without visiting the front-end website. The “front end” of a website is what users see when they visit a site.
DYdX has a newer version called v4 that operates on its own blockchain network called dYdX Chain, which makes it a “DEX chain,” one of the first of its kind.
DYdX Chain has $155 million in user deposits, DefiLlama data shows.
The protocol allows users to trade futures contracts of crypto pairs.
DYdX did not provide further details about the nature of the problem affecting its website.
The protocol’s website was among DeFi front ends previously reported to be vulnerable to domain name service hijacking.
When a website is “DNS hijacked,” users are redirected to a malicious website that can be used to steal their information.
DNS attacks
Last week, a flurry of coordinated DNS attacks spread throughout DeFi, affecting the front ends of projects, including lender Compound, crypto bridge Celer Network, and yield protocol Pendle.
Those attacks were linked to SquareSpace’s handling of its domain registration. SquareSpace, a website builder, purchased some web domains from Google and has been migrating them to its service.
The migration process causes multifactor authentication for the affected domain accounts to be turned off. SquareSpace has previously advised domain owners to enable multifactor authentication to ensure their domains are secured.
Software sale
Tuesday’s incident comes as reports emerged that dYdX is mulling the sale of its DeFi exchange software.
Per Bloomberg, unnamed sources said dYdX’s developers are negotiating with major crypto market makers, including Wintermute and Selini Capital, to sell the dYdX v3 software.
Acquisitions are not common in DeFi, because much of crypto’s software library is open source.
As such, competitors can spin up their own copies of existing projects, called forks.
Some protocols like Uniswap have tried to limit that practice by slapping business source licences on their work to prevent unauthorised copycats.
However, that practice is frowned upon in DeFi by critics who espouse open-source development.
Osato Avan-Nomayo is our Nigeria-based DeFi Correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.
