KyberSwap, a leading decentralized exchange (DEX) aggregator, announced a 50% reduction in its workforce following a $54 million exploit earlier this month.

CEO and co-founder Victor Tran announced the decision on social media on Dec. 24.

Elastic fallout

The cuts come as the company grapples with the fallout of the “Elastic exploit,” which compromised its protocol and resulted in significant user losses. Tran said:

“The past month has been among the most challenging in my journey as an entrepreneur. The decision to part ways with so many of our team members was heart-wrenching.”

The Elastic exploit, discovered on Nov. 25, allowed hackers to manipulate KyberSwap’s automated pricing mechanism and steal cryptocurrencies held in its liquidity pools.

While the company implemented a Treasury Grant Program to reimburse affected users up to 100% of their losses, the financial impact forced KyberSwap to take drastic measures.

Tran said the company was forced to make significant changes to make sure it was able to stand by the affected users. These changes include pausing the development of the KyberAI project and liquidity protocol initiatives, along with the streamlining of internal processes.

The post also highlighted the upcoming launch of Zap API, a new development designed to integrate KyberSwap’s liquidity access features into other DeFi applications. Tran emphasized the company’s commitment to “not only sustaining our platform but also to continuing to contribute to the wider DeFi ecosystem.”

Future uncertain

However, the workforce reduction remains a bitter pill to swallow for many in the crypto community. Critics question the decision, arguing that it disproportionately impacts employees while potentially undermining KyberSwap’s long-term growth.

Others express concerns about the future of the company’s ambitious projects that have now been put on hold.

In an attempt to mitigate the impact on departing employees, KyberSwap is creating a database to connect them with potential opportunities in the web3 space.

“These individuals are not only capable, but also bring a level of commitment and integrity that is invaluable.”

Tran wrote, praising the talent and dedication of his former team members.

The layoffs at KyberSwap serve as a stark reminder of the risks associated with DeFi, where security vulnerabilities can have significant financial and human consequences.

As the industry matures, balancing innovation with robust security and ethical business practices will remain a critical challenge for DEX platforms like KyberSwap.

The post KyberSwap cuts staff by 50% after $54M exploit appeared first on CryptoSlate.

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Filed under: Bitcoin - @ December 26, 2023 8:30 pm