KyberSwap will spend $4.7 million after talks with bot operators.

Decentralized exchange protocol KyberSwap has announced that it has received $4.67 million in funding after a security attack last week resulted in a massive loss of nearly $50 million from its liquidity pools.

The hacking incident targeted KyberSwap's Elastic pools, affecting several blockchains including Arbitrum, Optimism, Ethereum, Polygon, Binance Smart Chain and Base. The attacker exploited a vulnerability related to a tick loophole in Kyber-enhanced Liquid Pools.

By controlling these boundaries, the hacker doubles the liquidity and drains the pools, stealing more than $46 million worth of digital assets.

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Negotiate with operators of forward bots

In response to the attack, KyberSwap negotiated with operators of front-running bots responsible for withdrawing approximately $5.7 million in crypto from the protocol's pools on the Polygon and Avalanche networks during the hack.

The deal was finalized on November 26, with the bot operators agreeing to return 90% of the funds to the Polygon network's specified KyberSwap address, and received a 10% bonus as an incentive.

According to the official update, the recovered funds include:

361.92 axl-wstETH ($870.5k) 441.8 WETH ($919k) 261.5 wstETH (~$624k) 711,430.9 WMATIC (~$547.8k) 443,011~ 6 USDT (~$343k) 65,130 USDT (~$65.1k)

#PeckShieldAlert Our community contributor noticed that one of the KyberSwap exploits returned $361,876 USDC.e on #AVAX.pic.twitter.com/Lc5towMVCX

— PeckShieldAlert (@PeckShieldAlert) November 27, 2023

A deal with a hacker in limbo

It should be noted that this negotiation with the bot operators on the front lines is separate from the ongoing dialogue with the main hacker.

Although KyberSwap has expressed interest in negotiating with the hacker if it shows the same inclination, progress in these talks appears to be limited at this point. The team also announced the White Hat Award.

After partially recovering stolen funds from front-running bots, CyberSwap has confirmed that it can assist law enforcement and cyber security efforts in recovering users' funds from the hacker.

“Following the recovery of these user funds from the frontline bots, we will continue to support law enforcement and cyber security in recovering user funds from the exploiters.”