YAM Finance Addresses LlamaLend Mechanism in Recent Transaction Anomaly

YAM Finance has clarified that a recent suspicious transaction is linked to the LlamaLend mechanism rather than an Inverse contract vulnerability. According to Foresight News, the incident involved a 'donation attack' targeting sDOLA on LlamaLend, which increased the price from approximately 1.188 sDOLA = 1 DOLA to about 1.358 sDOLA = 1 DOLA. This led to the liquidation of nearly all user positions that borrowed crvUSD using sDOLA as collateral. The reason why the rise in collateral value triggered liquidation remains unclear, as it typically should move users away from liquidation thresholds. The secondary effects of this price anomaly are ongoing, resulting in a roughly 14% increase in the paper gains for users holding sDOLA without leveraging on LlamaLend. Additionally, DOLA is currently trading at about a 1% discount to its pegged value in the secondary market, prompting some community members to suggest that borrowers consider repaying DOLA debt during this discount phase. Previously, Foresight News reported that BlockSec monitoring indicated a suspected attack on the DeFi lending protocol Inverse Finance, resulting in a loss of approximately $240,000. This incident may involve manipulation of DOLA prices, leading to the liquidation of several users. BlockSec has contacted the relevant teams regarding this matter.