KyberSwap has recently achieved a significant milestone in recovering $4.67 million of the $47 million lost in a major security breach. The platform, last week, faced a hacking incident leading to a substantial loss of funds from its concentrated liquidity pools across several blockchains.
A major part of this recovery resulted from successful negotiations with operators of front-running bots. During the breach, these bots were instrumental in siphoning off about $5.7 million in cryptocurrency from KyberSwap’s pools on the Polygon and Avalanche networks. The KyberSwap team has confirmed that an agreement was reached where the bot operators returned 90% of the extracted funds to a specific address on the Polygon network. As compensation, the operators were awarded a 10% bounty.
Continued Efforts to Resolve the Main Breach
This recent recovery is distinct from the ongoing negotiations with the principal hacker of the KyberSwap attack. The team had offered a white hat bounty as a part of their negotiation efforts, but there has been little progress.
The initial attack targeted KyberSwap’s Elastic pools, adversely affecting funds on multiple blockchains, including Arbitrum, Optimism, Ethereum, Polygon, and Binance Smart Chain. The hacker exploited a vulnerability in the interval boundaries of Kyber’s concentrated liquidity pools. This allowed the attacker to double the liquidity for a short period, leading to the draining of the pools.
KyberSwap is actively working on strengthening its security protocols to deter similar attacks in the future. This event has put a spotlight on the security challenges faced by decentralized finance (DeFi) platforms, particularly in protecting digital assets against increasingly sophisticated cyber threats. The proactive and effective response from KyberSwap in reclaiming a portion of the lost funds showcases their commitment to security and protecting their users’ assets.
As KyberSwap continues to navigate through the aftermath of this breach, its focus on reinforcing security measures emphasizes the critical need for robust and resilient safeguards in the dynamic and ever-evolving cryptocurrency and decentralized finance landscape.