Decentralized exchange protocol KyberSwap has successfully recovered $4.67 million in funds following a recent security breach.
Last week, KyberSwap fell victim to a hacking incident that resulted in a substantial loss of $47 million from its concentrated liquidity pools. In a positive turn of events, a portion of the funds has been recovered through negotiations with the operators of front-running bots. These bots had extracted approximately $5.7 million in cryptocurrency from KyberSwap pools on the Polygon and Avalanche networks during the security breach.
The operators of the front-running bots agreed to a deal in which they committed to returning 90% of the illicitly obtained funds to a specified KyberSwap address on the Polygon network. As an incentive, a 10% bounty was offered to the bot operators.
It is important to note that this negotiation is separate from the ongoing discussions with the main hacker involved in the initial security breach. Despite the team’s efforts, including the offering of a white hat bounty, progress in negotiating with the primary hacker appears to be slow.
The hacker targeted KyberSwap’s Elastic pools, impacting funds across various blockchains, including Arbitrum, Optimism, Ethereum, Polygon, and Binance Smart Chain. The exploited vulnerability was related to an issue with the tick interval boundaries in Kyber’s concentrated liquidity pools. The hacker manipulated these boundaries to double the liquidity and subsequently drain the pools.