The hacker who stole millions from decentralized exchange aggregator KyberSwap has demanded full “executive control” of the “Kyber Enterprise.” The return of stolen funds is contingent on KyberSwap management meeting its demands by December 10, highlighting a problem with decentralization in general.
The KyberSwap hacker wants full control over KyberDAO’s governance to make changes to the protocol. They are demanding the resignation of the current management and the surrender of all documents and assets.
KyberSwap hacker outlines requirements
The exploiter assured that departing executives would be bought out at a “fair price,” while employees’ salaries would be doubled. Anyone who wants to leave will receive a 12-month severance payment “with full performance”. Additionally, the hacker offered liquidity providers 50% of their stolen funds.
“Under my leadership, Kyber is undergoing a complete transformation. It will no longer be the seventh most popular DEX, but a completely new cryptographic project,” they wrote.
Read more: The 12 Best Decentralized Exchanges for 2023
If Kyber fails to comply with the demands, the hacker will not return the stolen funds. The note was signed “Kyber Director.”
Last Friday, blockchain security company Cyvers reported a message from the exploiter promising Kyber negotiations. The announcement came following a $45 million exploit of Ethereum and other tokens by KyberSwap last Wednesday.
KyberSwap’s total lock value drops to $7 million after exploit | Source: DeFiLlama
The hacker appears to have withdrawn funds from liquidity pools. KyberSwap helps crypto users access liquidity from multiple blockchains.
Read more: Best crypto liquidity providers in 2023
Decentralization puzzle
While somewhat of a caricature, the hacker’s ransom demand gets to the heart of what some lawmakers have raised concerns about. Despite claims of decentralization, the reality of many protocols is in the hands of a few influential entities. This makes it possible for someone like the KyberSwap hacker to blackmail a majority group and take control.
Cardano founder Charles Hoskinson claimed earlier this week that it could take over the Bitcoin network by issuing subpoenas to three companies. This is despite maximalist claims that the network is decentralized and immune to government control.
Cardano itself is going through a process to give Hoskinson and Input Output Global less influence over network management. An upcoming Cardano vote will lay the foundation for fully decentralized governance. Voting begins on December 1st and ends on December 11th.
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