Following unrealistic demands from its exploiter to take over the Kyber network, the exploited decentralized exchange KyberSwap has made a different pivot in its revival push. The exchange said it will provide compensation to users exposed to the security breach discovered last month.
KyberSwap shares update on hacking
KyberSwap welcomed its users to a new month with an update on its crippling exploit that resulted in the loss of nearly $50 million in crypto assets. It sympathized with all users affected by the attack and assured them of the protocol's commitment to cooperate with law enforcement to ensure that the perpetrator, who is now resorting to extortion, is held accountable and all funds are recovered.
More importantly, the platform said its “current plan is for the KyberSwap treasury to provide each user (who lost money due to the exploit and did not recover it) a grant of up to the US dollar value such funds were granted at that time when such funds were withdrawn from their respective liquidity pools.”
Last month, KyberSwap was attacked by a villain who made a run for it with multiple cryptocurrencies on the platform. According to DeBank, Arbitrum (ARB), Optimism (OP), Ethereum (ETH) and Base were the assets most affected by the exploit. About $18.85 million was lost on Arbitrum, another $15.36 million on Optimism, and $7.44 on Ethereum. In total, the loss was around $46 million.
As an immediate precaution, users were advised to withdraw their funds immediately. The news negatively impacted the broader crypto community and even led to a drop in the price of the Kyber Network Crystal (KNC) token.
Hacker got greedy
What is noteworthy is that the team behind the KyberSwap DEX tried to salvage the situation by negotiating with the hacker. The KyberSwap Decentralized Autonomous Organization (DAO) proposed to pay the perpetrator a 10% bounty if the stolen funds are returned.
To put it in perspective, the perpetrator was given an ultimatum (November 25) to return the stolen asset or remain on the run. In a surprising twist, the hacker made a counter-proposal aimed at taking over Kyber Network's assets, paying out existing shareholders and taking control of KyberDAO as a condition of returning the funds
Since this option does not correspond to reality, KyberSwap hopes that the proposed refund plan will help reposition the protocol and its ecosystem.
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