KyberSwap: Negotiating With A Ghost

The hacker behind the $47 million heist from KyberSwap ($KNC) has hinted at a possible deal with the victims. 🕵️

The anonymous cyber bandit, who made headlines last week for the massive exploit, embedded a message in an $ETH transaction on November 28. They promised to unveil details about a “treaty” by November 30.

The hacker’s message conveyed a willingness to negotiate but lamented the hostile reception from KyberSwap’s executive team. Despite the tension, they left the door open for rescheduling the announcement if treated with more civility. Otherwise, they plan to proceed as initially scheduled. 🗓️

This development follows the alarming incident where KyberSwap’s Elastic Pools liquidity solution was drained of $47 million. In response, KyberSwap urged users to withdraw their funds and later announced a 10% bounty for the perpetrator. Interestingly, the hacker had already signaled a readiness to negotiate after a period of rest, leaving a breadcrumb in blockchain data.

As of the latest updates, KyberSwap has managed to claw back $4.7 million of the stolen funds. 🫳

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Celsius Converts To Farenheit

Celsius Network is undergoing bankruptcy proceedings, aiming to transform into a community-driven $BTC miner. ⛏️

They announced plans to repay users, whose funds have been locked since June 2022, by year’s end. Bloomberg revealed that post-Chapter 11, the company will receive a $450 million financial boost.

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Trouble With The Curve

Curve Finance, a popular decentralized exchange (DEX), has been in the spotlight following a series of exploits that have rocked the crypto world.

The platform, known for allowing users to swap like-assets such as $ETH for sETH or Tether’s $USDT for Circle’s $USDC, has seen its $CRV token climb by 500% even as the chaos unfolds.

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Crypto 101: Understanding the Risks of Decentralized Exchanges (DEXs)

Like every technology, DEXs come with their unique set of risks. Let’s dive into some of the most prevalent ones.

Smart Contract Risk 📜

One of the most significant risks when dealing with DEXs revolves around smart contracts. These programmable transactions run the entire DEX infrastructure. If there’s a bug in the smart contract code, it might be exploited and lead to substantial losses. Make sure you’re using a DEX that has undergone rigorous smart contract audits to mitigate this risk.

The DAO hack is a classic example of a vulnerability in a smart contract. The Decentralized Autonomous Organization (DAO) was a form of investor-directed venture capital fund, but a bug in its smart contract was exploited by a hacker who siphoned off a third of the DAO’s funds (around $50 million at the time).

Impermanent Loss 🔄

As a liquidity provider in a DEX, you could face what’s known as ‘impermanent loss’. This occurs when the price of your deposited tokens diverges. The larger the divergence, the more you stand to lose. The loss only becomes “permanent” if the prices don’t return to their original state by the time you withdraw your liquidity.

Price Slippage 📉

High market volatility can lead to price slippage on DEXs. Slippage refers to the difference between the expected price of a trade and the price at which it’s executed. While some slippage is common, large amounts can lead to unfavorable trade outcomes.

If you were trying to trade a large amount of a low-liquidity token on a DEX, you could experience severe price slippage. For instance, if you attempted to sell 10,000 tokens of a small project, your sell order could significantly impact the price, causing you to receive less than you anticipated.

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