The team behind decentralized finance protocol KyberSwap has “regrettably” cut its workforce by 50% to keep the firm’s business operations up and running following its $48.8 million exploit in November.

“Regrettably, we have also reduced our workforce by 50%,” said Kyber Network’s CEO Victor Tran on Dec. 24. “The decision to part ways with so many of our team members was heart-wrenching.”

The DeFi firm will, however, create a “voluntary database” to help departing employees seek new opportunities in the Web3 space, it said.

To slow the rate of capital expenditure, Tran said Kyber Network has temporarily paused its liquidity protocol initiatives and KyberAI project.

The CEO however stressed that its core business remains intact, including KyberSwap’s Aggregator and Limit Order functions.

“Moreover, we will soon be launching our Zap API, an innovative development that will enable dApps, wallets, and other projects to become the most convenient gateways for their users to access DeFi liquidity protocols,” Tran added.

But for now, the firm says it's looking to reimburse impacted customers from the November exploit.

Kyber Network commenced its Treasury Grants Program to facilitate that process on Dec. 20 and is aiming to distribute funds (in United States dollar stablecoins) on Feb. 1, 2024. Impacted users will need to register for reimbursement between Jan. 11 and Jan. 23, 2024.

A reference value of nearly $49 million was ascertained for users impacted from the primary KyberSwap exploit — however impacted users will only receive 60% of this value, Kyber noted.

An additional $6.6 million was stolen from front-run bots following the initial exploit.

The Kyber team initially tried to negotiate a bounty deal with the hacker but they demanded complete control over the company, including all Kyber assets and its governance mechanism, KyberDAO.

The hacker promised to buy the company at a fair valuation, but the Kyber team presumably rejected the offer.

DeFi pundit Doug Colkitt said the attacker used an “infinite money glitch” to carry out the Nov. 22 hack, which he described as a “complex and carefully engineered smart contract exploit” across several networks implementing KyberSwap pools.

Funds were taken from Avalanche, Polygon and Ethereum and layer-2 networks Arbitrum, Optimism and Base.

KyberSwap operates on the Kyber Network, a blockchain-based liquidity hub that aggregates liquidity across different blockchains and enables the exchange of tokens without an intermediary.

Source