The award, which is intended to lessen the financial strain on impacted parties, will be equal to the USD value of the assets lost in the security breach.
KyberSwap plans to reimburse users who were impacted by a major exploit that occurred on November 22 and resulted in a $48.8 million loss for the decentralised finance protocol. KyberSwap is addressing this by launching a grant programme from its treasury to compensate individuals who were harmed by the incident.
The award, which will be equal to the USD value of the assets lost in the security breach, is intended to lessen the financial burden on the impacted parties. This action demonstrates KyberSwap’s commitment to platform security and its user base. While the exact specifications and requirements for the grant are still being worked out, KyberSwap has promised to send out more information in two weeks.
Investigations into the security breach have shown that the tick interval boundaries in KyberSwap’s concentrated liquidity pools are the source of the vulnerability. Due to this flaw, an attacker was able to artificially manipulate liquidity, which led to a significant loss of funds.
After being valued at $47 million at first, the loss was later confirmed to be $48.8 million. When KyberSwap offered the wrongdoer a 10% reward in an effort to recover the stolen goods, they were met with unusual demands rather than acceptance.
Interestingly, $4.7 million of the stolen funds—which were taken separately by third-party MEV bots during the hack—have been successfully recovered by KyberSwap. The proposed treasury grants and this partial recovery demonstrate the platform’s proactive handling of security breaches. The event also made KyberSwap reevaluate its security procedures in detail, and the team is determined to improve defences against such attacks in the future.
The decentralised finance community has made a noteworthy effort to uphold trust and support among its users in the wake of the crisis by providing treasury grants.