The team behind the decentralized finance protocol KyberSwap has cut its workforce by 50% to continue exchange operations following the $48.8 million hack in November. Kyber Network CEO Victor Tran confirmed the 50% workforce reduction on December 24, stating that making such a decision was heart-wrenching.
Notable Developments at KyberSwap
In light of this development, the DeFi company announced it would create a database to help the separated employees look for new opportunities in the Web3 space. Tran mentioned that to slow down capital expenditures, Kyber Network has temporarily suspended its liquidity protocol initiatives and the KyberAI project.
Additionally, the CEO stated that KyberSwap’s core operations, including exchange functions, remain unaffected and shared the following:
“We will also soon launch our Zap API, an innovative development that will ensure dApps, wallets, and other projects are the most suitable gateways for their users to access DeFi liquidity protocols.”
The company also announced its intention to reimburse customers affected by the November hack. Kyber Network launched the Treasury Grant Program on December 20 to facilitate this process and aims to distribute funds by February 1, 2024. Affected users will need to register for reimbursement between January 11 and January 23, 2024.
How Did the Process Begin?
Kyber identified a reference value of approximately $49 million for users affected by the primary KyberSwap hack, but noted that affected users would only receive 60% of this value. Following the initial attack, an additional $6.6 million was stolen through the use of bots.
Initially, the Kyber team tried to negotiate a bounty agreement with the hackers, but the hackers demanded full control over all Kyber assets and the governance mechanism KyberDAO. The hackers promised to purchase the company at a fair value, but the Kyber team likely rejected this offer.
DeFi expert Doug Colkitt described the November 22 attack as a sophisticated and carefully designed smart contract attack on KyberSwap’s stake pools across various networks, using an infinite money glitch. Funds were taken from Avalanche, Polygon, and Ethereum, as well as Layer-2 networks Arbitrum, Optimism, and Base.
KyberSwap operates on Kyber Network, a blockchain-based liquidity hub that aggregates liquidity across different blockchain ecosystems and enables token exchange without an intermediary.
