How much was lost in the dYdX hack?

The dYdX hack resulted in $211K in losses on November 24, 2021.

What attack technique was used in the dYdX exploit?

The dYdX exploit utilized Other. Understanding this attack vector is critical for smart contract auditors and developers building secure DeFi protocols.

How can developers prevent similar smart contract attacks?

Preventing smart contract hacks requires a combination of secure coding practices, thorough security audits, and understanding common attack vectors like reentrancy, oracle manipulation, and access control flaws. Smart Contract Hacking (SCH) provides hands-on training to help developers and auditors identify and prevent vulnerabilities before deployment.

dYdX Hack

TOTAL LOST $211K

Low Nov 24, 2021 Other

Affected Chain 2021 Incident surface

Recovered - No recovery reported

All-Time Rank #1273 By amount stolen

Protocol Type Exploit/Other Target category

Incident Overview

Affected contract:

https://etherscan.io/address/0x53773fE5…51Ba2C

Timeline

Nov 27 05:21. The dydX team received a report from a member of a trading firm regarding a vulnerability in the dYdX deposit proxy contract.

Nov 27 06:40. The dYdX team confirmed the bug. They asked samczsun and Georgios from Paradigm to join them in the war room as they respond to the vulnerability.

Nov 27 06:50. The dYdX and Paradigm teams together decided the best course of action is to execute a white-hat hack of vulnerable funds to move them to a safe location.

Nov 27 07:33. As samczsun finished a proof of concept for a white-hat hack, the dydX began implementing the recovery flow in the frontend and implementing a bot to save any additional funds that become vulnerable.

Nov 27 08:01. The dydX determined that ~700 addresses had allowances set on the vulnerable proxy contract. Of these, about 180 had funds at risk, totaling ~$2M.

Nov 27 09:27. The dydX team asked Etherscan to remove the verified source code from the proxy contract and they made the source code on GitHub private.

Nov 27 10:33. The white-hat escrow contract was deployed.

Nov 27 10:56. The setAllowance() function was disabled in the dYdX exchange frontend.

Nov 27 12:04. The first white-hat hack was executed via flashbots.

Nov 27 12:22. The front end was updated to show the warning and recovery process to users affected by the bug. Allowances for deposits were re-enabled using the old deposit flow.

Nov 27 12:32. Announcement was made on Twitter and Discord:

https://twitter.com/dydxprotocol/status/1464572467872247815?s=20

Nov 27 12:43. The second white-hat hack was executed via flashbots for two more addresses.

Nov 27 13:16. A recovery bot was deployed to automatically retrieve and escrow any more funds that become vulnerable.

As of Dec 8 at 18:00 UTC, $533,000 of additional funds were rescued by the bot, and nearly 80% of affected addresses have revoked approval from the vulnerable contract. Another estimated $211,000 in funds were exploited by frontrunner bots.

Incident Report

Protocol / Project dYdX

Date of Incident November 24, 2021

Attack Technique Other

Classification Exchange (DEX)

Primary Source View Post-Mortem

Protocol Information

Protocol Type Exploit/Other

Affected Token DYDX

Official Website dydx.exchange/

Protocol Twitter/X @dydxprotocol

Team Anonymous

Source Code Unverified

Market Context at Time of Hack

Token Categories

Decentralized Exchange (DEX) Token Derivatives Layer 1 Made in America Binance Ecosystem Binance Listing Perp dex coins

Protocol Links

GitHub Discord Reddit

What the Attacker Needed to Succeed

Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.

Technical Knowledge Deep understanding of other and Solidity and EVM internals

Capital Required Seed capital to cover gas and initial position setup

On-Chain Access Ability to interact with smart contracts and deploy a custom exploit contract

Protocol Analysis Identification of the exploitable vulnerability in dYdX's contract logic - root cause: exchange (dex)

Execution Speed Precise transaction ordering and timing to exploit the vulnerability within a single atomic block

Obfuscation Plan A strategy to launder and move stolen funds - typically through mixers, cross-chain bridges, or decentralized DEX swaps to resist tracing

What Auditors Should Check

Could this have been caught in audit? Likely — with a thorough Other audit checklist and test coverage

If you're auditing a protocol with similar architecture to dYdX, these are the critical security checks that could have prevented this incident (November 2021).

Verify all logic paths related to Other are guarded by proper access controls and input validation
Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs

Master these auditing techniques with hands-on labs and real exploit scenarios in the Smart Contract Hacking course.

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Sources & References

01
Source 1 https://dydx.exchange/blog/deposit-proxy-post-mortem

Threat Assessment

Severity Level

LOW

Attack Vector Other
Root Cause Exchange (DEX)
Year 2021

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