Following a $48.8 million hack in November, KyberSwap, a decentralized finance protocol, has reduced its workforce by 50% to maintain exchange operations. Victor Tran, CEO of Kyber Network, confirmed the layoffs on December 24, expressing the difficulty of such a decision.
The DeFi company is creating a database to assist the laid-off employees in finding new opportunities within the Web3 space. Tran also announced the temporary suspension of Kyber Network’s liquidity protocol initiatives and the KyberAI project to slow down capital expenditures.
Despite the setbacks, the CEO assured that KyberSwap’s core functions, including exchange operations, remain intact. He also mentioned the upcoming launch of Zap API, an innovative development aimed at providing the most suitable gateways for dApps, wallets, and other projects to access DeFi liquidity protocols.
Kyber Network also plans to reimburse customers affected by the November hack. A Treasury Grant Program was initiated on December 20 to facilitate this process, with the goal of distributing funds by February 1, 2024. Affected users must register for reimbursement between January 11 and January 23, 2024.
Kyber has identified a reference value of approximately $49 million for users impacted by the primary KyberSwap hack, but they will only receive 60% of this value. Following the initial attack, an additional $6.6 million was stolen through automated bots.
The Kyber team initially tried to negotiate a reward agreement with the hackers, but the hackers demanded full control over the company, including all Kyber assets and the KyberDAO governance mechanism. The hackers promised to purchase the company at a fair value, but the offer was likely declined by the Kyber team. DeFi expert Doug Colkitt described the November 22 attack as a sophisticated and carefully crafted smart contract attack on KyberSwap stake pools across various networks, exploiting an infinite money glitch. Funds were taken from networks including Avalanche, Polygon, Ethereum, and 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.