Yearn Finance Loses $1.4 Million Due to Programming Error
Yearn Finance Loses $1.4 Million Due to Programming Error
Yearn Finance, a pioneering DeFi platform, announced that a programming error while interacting with the CRV liquidity pool resulted in a loss of $1.4 million.
Yearn Finance's $1.4 Million Loss Due to Programming Error
On December 13, Yearn Finance disclosed an incident involving the yCRV liquidity pool, causing a loss of $1.4 million, equivalent to 63% of the pool's value.
The programming error occurred during the token fee conversion process, leading the project to swap 3,794,894 lp-yCRVv2 but only receiving 779,958 yvDAI in return.
Yearn Finance's Announcement on GitHub
Yearn Finance's transaction temporarily unbalanced the yCRV liquidity pool until other users jumped in for arbitrage opportunities, stabilizing the pool. Yearn is urging those who profited from the incident to "return the appropriate funds to the project's treasury."
Overall, Yearn is believed to have lost $1.4 million due to this error, accounting for 2% of the DeFi platform's total treasury.
To prevent similar incidents in the future, the Yearn team plans to separate the smart contracts managing liquidity pools, update warning messages for better visibility, and impose stricter pricing conditions.
This marks the second technical issue related to Yearn Finance in 2023. In April, an older version of Yearn, iearn, was hacked, resulting in a $11.6 million loss.
In November, the price of Yearn's token YFI experienced significant volatility, leading to a $9 million loss in dYdX's insurance fund.
YFI Price Volatility
1D chart of the YFI/USDT pair on Binance as of 09:15 AM, December 14, 2023.
Stay tuned for more updates on this developing story.
