Yearn.finance, a decentralised finance protocol, is urging arbitrage traders to return $1.4 million lost due to a multisignature scripting error, which led to a significant drain of its treasury.
The issue arose when a faulty multisig script caused the entire treasury balance of 3,794,894 lp-yCRVv2 tokens to be mistakenly swapped, as disclosed in a GitHub post by Yearn contributor "dudesahn."
This error occurred during the conversion of lp-yCRVv2 tokens, generated from vault harvest performance fees, into stablecoins on CowSwap, a decentralised exchange.
The trade resulted in Yearn receiving 779,958 DAI yVault (yvDAI) tokens, causing a 63% decrease in the value of the liquidity pool from its treasury, relative to the lp-yCRVv2's spot price at that time.