Kyber Network has, in a Thursday, December 24 statement, confirmed downsizing its workforce by half in an effort to sustain the business operations. The team running the decentralized finance (DeFi) protocol, KyberSwap, regretted the decision to cut the workforce.
The firm iterated its priorities as keeping the aggregator and limit order functions running while also reimbursing customers affected by the $48.8 million exploit. The DeFi team regretted the decision to downsize the workforce, though inevitable following the November exploit that substantially disrupted the firm’s business.
Kyber Network Downsize Workforce to Sustain Operations
Kyber Network chief executive Victor Tran disclosed on Thursday last week that the decision to let go of many of the team members was a heart-wrenching experience. He added that the DeFi firm proposes creating the voluntary database in an effort to help the departing members secure new opportunities within the Web3 space.
Tran disclosed that Kyber Network temporarily halted the liquidity protocol initiatives to slow the capital expenditure rate. The cut on spending will temporarily affect the KyberAI project, which Tran also declared paused.
The chief executive reaffirmed that the core business, namely Aggregator and Limit Order, would remain intact during the period. Tran added that Kyber Network will unveil the Zap API comparison innovative development targeting to enable dApps and wallets. The initiative targets creating a convenient gateway to facilitate users’ access to the DeFi liquidity protocols.
Tran restated the firm priorities as exploring means to reimburse the customers affected by the unfortunate exploit executed in November.
Kyber Network Prioritize Reimbursing Victims Affected by November Exploit
The march towards reimbursing exploit victims is on top gears, with Kyber Network establishing the Treasury Grants Program on December 20. The initiative targets distributing reimbursements in US dollar-denominated stablecoins on February 1 next year.
Kyber Network urged affected users to register for the reimbursement starting January 11 and ending January 23. Kyber noted that the reimbursement references a $49 million value for users impacted by the KyberSwap exploit. Nonetheless, the users will benefit from 60% reimbursement of the value.
The Kyber team acknowledged that another $6.6 million was lost from the front-run bots just after the initial exploit. The team opened negotiation for a bounty deal with the hacker. The team offered the hacker the chance to retain 10% and return 90% of the exploit fund. The hacker turned down the offer, seeking complete control over the entity, Kyber assets, and KyberDAO’s governance mechanism.
The hacker offered to acquire the DeFi firm at its fair valuation, a move vigorously dismissed by the Kyber team.
Hacker Exploits Vulnerability of Blockchain-based Liquidity Hub
DeFi analyst and pundit Doug Colkitt indicated that the attacker deployed an infinite money glitch to execute the November 22 hack.
The pundit considered the exploit complex, where the attacker keenly engineered smart contract exploits” across multiple networks that implement KyberSwap pools.
Colkitt reported that funds were stolen from several chains, including Avalanche, Polygon and Ethereum. Also, layer-2 networks were not spared, with Arbitrum, Optimism and Base acknowledging losses attributed to the November exploit.
Colkitt explained that the widespread nature of the exploit victims arises from KyberSwap’s broad presence. In particular, KyberSwap runs on the Kyber Network itself, a blockchain-based liquidity hub. The hub is involved in aggregating liquidity from several blockchains while facilitating token exchange without involving intermediaries.