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Bounty Frenzy: KyberSwap Tempts Hacker with 10% Reward for $50M

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HANZO
Nov 25, 2023 at 08:13 am

In the aftermath of the significant breach that led to the misappropriation of $50 million on November 22 from KyberSwap's decentralized exchange (DEX), the decentralized autonomous organization (DAO) overseeing the platform decided to take proactive measures. Their response was to open a channel for negotiations with the elusive attacker.

Source: EtherscanSource: Etherscan

The DAO, reaching out to the assailant who had declared a temporary hiatus, expressed a willingness to engage in discussions. The attack specifically targeted KyberSwap's liquidity pools (LPs), resulting in a substantial impact on the decentralized exchange. Prior to the security breach, KyberSwap proudly reported a total value locked (TVL) of around $80 million. However, in the aftermath, the TVL plummeted drastically to a mere $7.78 million.

Recognizing the sophistication of the hack, the DAO, leveraging a message from a contract deployer wallet, commended the attacker's ingenuity in executing a high-expected value (EV) exploit that managed to evade detection by many. The DAO proposed a resolution: a bounty equivalent to 10% of the users' funds, taken during the hack, would be offered as an incentive for the safe return of all compromised funds.

KyberSwap, in a strategic move, set a deadline for the attacker to comply, scheduling it for November 25 at 06:00 UTC. This ultimatum aligns with a trend observed in decentralized finance (DeFi) hacks, where attackers use transaction signatures to taunt their victims. Additionally, it provides a platform for protocol teams to initiate negotiations with malicious actors.

The decentralized finance (DeFi) landscape has experienced a surge in cyber attacks, with DefiLlama reporting losses exceeding $290 million in exploits for the current month alone. The cumulative impact for the year reaches approximately $1.2 billion, underscoring the vulnerabilities and challenges faced by the DeFi sector. As KyberSwap anticipates a response to their negotiation offer, this incident further contributes to the evolving narrative surrounding the dynamics between DeFi platforms and the persistent threat of malicious actors within the cryptocurrency space.

Read More: Crypto Currents: Weekly Surges and Subtle Shifts

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