Address: wdCqxq8RoyA9eW7AMcWxm11CMqcr3avEXj8V661VnUZpoG1kb
Date: April 14, 2026
Affected Protocol: Interlay Lending / DeFi Protocol
Affected Asset: vDOT (Bifrost liquid staking DOT)
Incident Summary
During the Hyperbridge security incident on April 13, 2026, the exploiter minted a large quantity of fraudulent DOT on the Ethereum network via a vulnerability, causing extreme and anomalous price volatility for DOT and its derivative assets on Ethereum. Due to the failure of the Interlay protocol's Oracle price feed on the Ethereum side to filter this corrupted data effectively (specifically, by not utilizing the accurate native-chain price provided by Bifrost), my borrowing position was wrongfully liquidated by the system based on distorted market prices, resulting in significant financial loss.
Loss Details
Asset Liquidated: 4,257 vDOT
Debt Position: ~4,000 USD
Fair Market Value of Asset: ~4,500 USD (estimated at the pre-incident normal market rate)
Net Loss: ~4,500 USD (Asset Value - Debt)
Core Liability Argument: Oracle Design Flaw
I assert that this liquidation constitutes an abnormal loss caused by a "protocol-level failure," based on the following grounds:
Faulty Data Source Selection: Interlay's Oracle on the Ethereum side captured the polluted liquidity pool prices from the Hyperbridge attack, while ignoring the vDOT price data provided officially by Bifrost, which reflected the true on-chain state of the Polkadot network. As the issuer of vDOT, Bifrost's Oracle maintained the accurate price throughout the incident.
Lack of Anomaly Filtering: The protocol's Oracle mechanism lacked emergency logic for cross-chain bridge attack scenarios (e.g., price deviation threshold checks, failover to alternative data sources), failing to protect users from the fallout of third-party infrastructure failure.
Factual Basis: The Hyperbridge team and security auditors (e.g., [Name of Auditor]) have confirmed the incident as a bridge-layer exploit. The native Polkadot and Bifrost on-chain vDOT did not depeg. The liquidation was solely a consequence of corrupted data on the Ethereum side.
Claim Request
Given that the deficiency in Interlay's Oracle risk controls directly led to the loss of my assets, I demand:
Full Compensation for Losses: The Interlay Treasury or Insurance Fund to disburse 4,500 USDT to me.
Form of Compensation: Direct transfer to my wallet address: wdCqxq8RoyA9eW7AMcWxm11CMqcr3avEXj8V661VnUZpoG1kb
Protocol Improvement: A public commitment to switch or weight the Oracle data source to the official Bifrost feed and implement an emergency pause mechanism to prevent recurrence of similar incidents.
Conclusion
I remain a supporter of the Interlay and Polkadot ecosystems. This event was not a normal market volatility risk but a result of the protocol relying on an unreliable external data source. A responsible DeFi protocol should protect its users from "ghost liquidations" caused by infrastructure failures. I expect a positive and fair resolution from the team.