Yearn Finance Reports Faulty Script Wiped Out $1.4 Million From Its Treasury

Yearn Finance

Decentralized finance protocol is hoping arbitrage traders will return $1.4 million in funds after a multi-signature scripting error, resulting in a large amount of the protocol’s treasury being drained.

The incident took place during a “regular fee token conversion process on behalf of Yearn’s treasury,” according to a disclosure post on GitHub. The faulty script caused 3,794,894 lp-yCRVv2 tokens to be swapped for 779,958 yvDAI tokens.

The Yearn transaction temporarily disrupted the balance of the yCRV liquidity pool, subsequently stabilizing as opportunistic users exploited the price discrepancy. Yearn appeals to those who gained from the incident, urging them to “return a suitable amount to the project’s treasury.”

In recap, due to this error, Yearn is estimated to have absorbed a $1.4 million loss, constituting 2% of the entire DeFi platform’s treasury. To proactively mitigate similar occurrences, the Yearn team intends to segregate smart contracts overseeing liquidity pools, enhance conspicuous warning messages, and enforce more stringent price conditions.

This marks the second technical incident associated with Yearn Finance in 2023. In April, a prior iteration of Yearn, iearn, fell victim to a hack, resulting in an $11.6 million loss. In November, Yearn’s YFI token underwent substantial volatility, culminating in a $9 million loss in the dYdX DEX platform insurance fund.

Yearn Finance
1D graph of the YFI/USDT pair on Binance on December 14, 2023

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Chi Do
Chi Do
Chi Do is a content writer at CoinMinutes, responsible for creating most of the content on the website, including news related to Bitcoin (BTC), Ethereum (ETH), Blockchain, Decentralized Finance (DeFi), and more. With a keen interest in cryptocurrencies since the 2020s, Chi has acquired extensive experience and knowledge in this field. Chi holds a Bachelor's degree in communication from Academy of Journalism and Communication in Vietnam.

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