KyberSwap will provide financial assistance to users affected by a serious exploit on November 22, which resulted in a $48.8 million loss to the decentralized finance protocol. To address this issue, KyberSwap is establishing a grant scheme with the Treasury to provide compensation to those negatively affected by the incident.
The subsidy is designed It alleviates the financial burden of affected individuals and provides a U.S. dollar amount equivalent to the assets lost due to the security breach. This move highlights KyberSwap’s commitment to its user community and platform security. Specific details and criteria for the grant are being finalized, but KyberSwap has promised to provide additional information within two weeks.
Investigation into the security breach revealed that the vulnerability originated from tick interval boundaries within KyberSwap’s concentrated liquidity pool. This loophole allowed attackers to artificially manipulate liquidity, resulting in significant fund depletion.
The loss, initially assessed at $47 million, was later confirmed to be $48.8 million. To recover the stolen assets, KyberSwap offered a 10% compensation to the criminals and received an unconventional request instead of accepting.
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Interestingly, KyberSwap successfully recovered $4.7 million in funds that were separately stolen by third-party MEV bots during the hack. This partial recovery and proposed financial grant reflects the platform’s proactive approach to resolving security breaches. Additionally, the incident led to a thorough review of KyberSwap’s security protocols and the team committed to strengthening safeguards to prevent future exploits.
This response to the crisis represents a notable effort by the decentralized finance community to maintain trust and support among users following a security breach by providing treasury subsidies.
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