Kyber Network Slashes Staff by Half a Month Following $49M Security Breach
KyberSwap, the decentralized finance protocol, has reduced its staff by 50% after a security incident, but remains committed to its core business
The team behind the decentralized finance protocol KyberSwap has, with regret, reduced its staff by 50% to maintain the company's operations following a $48.8 million security incident in November.
"Regrettably, we have also reduced our workforce by 50%," Kyber Network’s CEO Victor Tran stated on Dec. 24. He added, "The decision to part ways with so many of our team members was heart-wrenching."
To support the departing employees, the DeFi firm is setting up a "voluntary database" aimed at assisting them in finding new opportunities within the Web3 domain.
To conserve funds, Tran mentioned that Kyber Network has put a hold on its liquidity protocol projects and the KyberAI program.
In the past month, KyberSwap has faced unprecedented challenges due to the Elastic exploit. Despite this, I am grateful to say that our core business, including the Aggregator and Limit Order functions, remains robust.
Moreover, we will soon be launching our Zap API, an… — Victor Tran (@vutran54) December 25, 2023
However, he emphasized, "the core business remains intact, including KyberSwap’s Aggregator and Limit Order functions." He also announced the upcoming introduction of the Zap API, a new development aimed at simplifying access to DeFi liquidity protocols for dApps, wallets, and other projects.
Currently, the firm is focusing on reimbursing customers affected by the November incident. The Kyber Network initiated its Treasury Grants Program on Dec. 20 and plans to distribute funds (in United States dollar stablecoins) on Feb. 1, 2024. Impacted users must register for this reimbursement between Jan. 11 and Jan. 23, 2024.
The calculated loss for those affected by the initial KyberSwap exploit is nearly $49 million, yet recipients will only receive 60% of this value, as noted by Kyber. Additionally, $6.6 million was stolen by front-run bots in the aftermath of the exploit.
Following the incident, the Kyber team tried to negotiate with the hacker, who demanded complete control over the company, including all Kyber assets and the KyberDAO. The hacker offered to purchase the company at a fair valuation, but the Kyber team presumably rejected this offer.
DeFi commentator Doug Colkitt described the Nov. 22 hack as an "infinite money glitch" and a "complex and carefully engineered smart contract exploit" across multiple networks incorporating KyberSwap pools.
Funds were taken from a variety of networks including Avalanche, Polygon, Ethereum, and layer-2 networks like Arbitrum, Optimism, and Base.
KyberSwap operates within the Kyber Network, a blockchain-based liquidity hub that pools liquidity from different blockchains, allowing for token exchanges without the need for an intermediary.
