The team responsible for the decentralized finance (DeFi) platform KyberSwap has made the difficult decision to downsize its staff by 50% in response to a significant $48.8 million attack suffered in November. Victor Tran, the CEO of Kyber Network, expressed regret over the layoffs, calling it a heartbreaking decision. However, the company plans to assist departing employees by creating a voluntary database to aid them in finding new opportunities within the Web3 ecosystem.
In a bid to control capital expenditures, Kyber Network has temporarily halted its liquidity protocol plan and KyberAI project. Despite these measures, Tran emphasized that the core operations of the company, including KyberSwap's aggregator and limit order functionalities, remain unchanged. Additionally, the company aims to introduce the Zap API, an innovative development to streamline user access to DeFi liquidity protocols through dApps, wallets, and other projects.
Kyber Network is also committed to compensating customers affected by the November breach. To facilitate this, they initiated a Treasury grant program, intending to distribute funds (in the form of a USD stablecoin) on February 1, 2024. Affected users must register between January 11 and January 23, 2024, to be eligible for compensation. Notably, while the total value of the vulnerability amounted to nearly $49 million, affected users will only receive 60% of this value.
Following the initial breach, an additional $6.6 million was siphoned by front-running bots. Initially, Kyber attempted to negotiate a deal with the hackers, who demanded full control of the company and its governance mechanism, KyberDAO. Despite the hacker's proposal to acquire the company at a reasonable valuation, it seems the Kyber team declined the offer.
According to DeFi expert Doug Colkitt, the November 22 hack exploited an "infinite funds glitch," described as a sophisticated smart contract vulnerability across multiple networks that implemented KyberSwap pools.
KyberSwap operates on Kyber Network, a blockchain-based liquidity hub that consolidates liquidity from various blockchains, facilitating token swaps without requiring an intermediary. Funding for Kyber Network comes from various sources, including Avalanche, Polygon, Ethereum, and layer 2 networks like Arbitrum, Optimism, and Base.
