Yearn asks for money back after it accidentally loses part of its treasury

The incident happened after a “faulty multisig script” swapped Yearn’s entire treasury balance

article-image

Andre Cronje/Shutterstock modified by Blockworks

share

Updated Dec. 13, 2023 at 1:33 pm ET: Modified headline and context following Yearn clarification.

Thanks to a script error, Yearn lost part of its treasury.

While it initially posted that it lost 63% of the treasury, it corrected its GitHub post to say that it lost “63% of the LP value.” The clarification was made Wednesday after Blockworks published the initial figures.

“When factoring in the 779,958 yvDAI tokens received from this trade, the total loss experienced by Yearn’s treasury comes out to about 63%,” the post said initially.

This loss occurred when a malfunction in a multisig (multi-signature) script led to the unintended swap of Yearn’s treasury balance.

The company clarified that the funds were strictly from Yearn’s treasury, and not from any customer funds.

According to a post, a “faulty multisig script caused Yearn’s entire treasury balance of 3,794,894 lp-yCRVv2 tokens to be swapped.” The incident happened on Dec. 11. 

“This amount comprised a large portion of the Curve pool, and therefore incurred significant slippage which arbed back to the normal price by the market shortly after,” Yearn wrote.

“When factoring in the 779,958 yvDAI tokens received from this trade, the total loss experienced by Yearn’s treasury comes out to about 63%.”

The DeFi protocol is also asking “anyone who profitably arbed this mistake to return an amount that they feel is reasonable to Yearn’s main multisig ychad.eth.”

The post explained that multiple oversights led to the faulty transfer. The entire treasury balance, including fees, was transferred to the trading multisig, which sent the transaction to CoW Swap for 30 or so orders — including the one to swap the balance. 

Read more: Sorella and CoW Protocol have something in common: Making on-chain exchanges work better

The post said that the high volume of trades involved in this single transaction significantly complicated the process of human review, leading to the oversight not being caught in time.

“The script used by the trading multisig to swap tokens lacked sufficient output checks and contained a logical error that would have capped the trade size to a reasonable amount,” Yearn wrote.

The protocol put new checks in place to prevent the same error from happening again. These include segregating protocol-owned liquidity (POL) funds into separate entities, enhancing trading scripts with more human-readable output messages, and imposing “stricter price impact thresholds” during trades.

Earlier this year, Yearn was targeted in an attack. The attacker was able to make off with roughly $11 million in stablecoins. 

The attack happened when a vulnerability in a Yearn vault was exploited, allowing the attacker to access tether (USDT) deposits.

Using 10,000 USDT, the attacker then minted 1.2 quadrillion yUSDT — the Yearn-equivalent token — and swapped them for stablecoins using Curve Finance to bag $11.6 million.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates (11).png

Research

We believe that Exponent is best positioned to dominate the Solana yield market – the fastest-growing sector in the ecosystem – with topline liquidity increasing at an annualized rate of nearly 600%. The founding team (ex-Squads, Kamino, Solana Foundation) cares deeply about product, security, design, and user experience and understands the foundation for building a great protocol. The team’s deep ties in Solana DeFi also present a significant strategic advantage, as evidenced by Exponent PTs being onboarded as collateral on Kamino, Drift, and Loopscale before its main competitor, RateX. In this regard, we view PT integrations in money markets as the most compelling avenue for Exponent to expand its market share and own its vertical.

article-image

Franklin Templeton’s Innovation Head Sandy Kaul says institutions will issue stablecoins and tokenized cash offerings to stay competitive

article-image

Surviving financial doomsday takes some preparation

article-image

Pump.fun’s launch partners include Kraken, Kucoin, Bitget, Bybit, Gate and MEXC

article-image

Monad Foundation’s Keone Hon said the team’s been “thinking about how to grow the onchain economy for some time”

article-image

Cuts to government R&D budgets may prove penny wise, bitcoin foolish

article-image

Still relatively little is known about the memecoin platform’s forthcoming token