(Yearn Finance clarifies incident impact on LP position)
Yield-farming protocol Yearn Finance has issued a correction regarding an incident that affected its treasury. The faulty script used in a token conversion process caused 63% of Yearn’s own LP position in Lp yCRV to be wiped out. However, no user funds were affected by the incident.
The Incident and its Consequences
The incident occurred during a regular fee token conversion process on behalf of Yearn’s treasury. The faulty script led to the swap of 3,794,894 lp-yCRVv2 tokens for 779,958 yvDAI tokens. This caused significant price slippage, but the market quickly corrected itself.
Losses and Expected Returns
Yearn Finance suffered losses totaling $1.4 million as a result of the incident. However, the protocol team is expecting some returned funds and has opened communication channels for this purpose.
Preventing Future Incidents
To prevent similar incidents in the future, Yearn Finance developers plan to implement measures such as separating POL funds into dedicated manager contracts, introducing more human-readable output messages on trading scripts, and enforcing stricter price impact thresholds.
Previous Exploits
This incident is not the first time Yearn Finance has experienced vulnerabilities. Earlier this year, an exploit involving an early version called iearn resulted in $11.6 million in damages. In February, another exploit led to the loss of $11 million worth of crypto from one of its vaults.
Hot Take: Yearn Finance Faces Yet Another Setback
Yearn Finance has encountered another setback with a faulty script that caused significant losses. While no user funds were affected, the incident wiped out 63% of Yearn’s own LP position in Lp yCRV. This highlights the need for stricter protocols and better checks in place to prevent such incidents. Yearn Finance is actively working on implementing measures to prevent future vulnerabilities and has experienced similar exploits in the past. It remains to be seen how the protocol will recover from this setback and regain trust from its users.
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