During the weekend of July 01 to July 03, the NZDS/USDC liquidity pool, experienced minor price movements occurring at regular intervals. The prices provided to the protocol had a small range between 0.61 (0.612755) and 0.62 (0.620340). A number of users were able to use this information and make favorable trades against the pool’s liquidity providers.
In response to this event, at around 12pm EST on July 03, 2022, the DFX team paused the NZDS/USDC pools on Ethereum and Polygon to prevent further trading. Around 1:30pm EST on the same day, the DFX team decided to pause all DFX AMM pools as a precautionary measure while the investigation continued.
The relevant transactions started around midnight EST July 02. The 1% oscillating movement in price data was taken advantage of, causing about 5% of the total value (approximately $250k USD) in the NZDS/USDC pool on Ethereum to be removed.
The funds taken from the pool during the incident are being held in NZDS on-chain and we are in communication with the wallets to negotiate a return of the removed funds. This will allow DFX to make impacted liquidity providers in the NZDS/USDC pools unaffected from this incident and avoid losses for users of the protocol.
We will resume the pools after a thorough data review in collaboration with our oracle provider to ensure all systems are aligned on expected weekend behavior. We plan to resume trading within the next several days.
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We are very excited about this next step for DFX Finance, and we look forward to sharing more with you all very soon.
Thank you for the support and stay safe!
About DFX Finance
DFX is a decentralized foreign exchange (FX) protocol that facilitates the seamless exchange of fiat-backed stablecoins denominated in a growing number of currencies. The current reliance on USD-pegged stablecoins creates undue economic friction for those in other parts of the world,
and DFX is here to change that.✨
Using a hyper-efficient AMM, optimized for low volatility trading, DFX provides FX swaps with rates that will beat any bank, money changer, or FX platform.💱
We’re super excited to build the FX infrastructure for DeFi and would love to hear more of your ideas and comments on how we can make DFX better together!
DFX Finance. Stablecoins for the world.🌐
