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Optimism’s DEX Hits Record $12 Billion Weekly Volume After KyberSwap Attack: Report

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In a recent development, Optimism, the layer 2 scaling solution riding on Ethereum, has witnessed a phenomenal surge in decentralized exchange (DEX) trading activity. The surge has catapulted its trading volume to an impressive $300 million range, surpassing even the activity on Ethereum itself.

According to Colin Wu, a prominent Chinese crypto reporter from Wu Blockchain X, the surge in Optimism’s DEX trading activity has been highlighted through a recent post. Data unearthed by DefiLlama revealed staggering numbers. The 24-hour trading volume for Optimism’s DEX now stands at an impressive $344.98 million. Even more astonishing is the 7-day trading volume, which has skyrocketed to $11.87 billion, marking an extraordinary surge of 1687%.

Optimism’s Trading Volume Soars And TVL Hits $769.6M

OP boasts a remarkable surge in trading volume and has witnessed substantial growth in its Total Value Locked (TVL), currently at $769.6 million. This reflects a monthly surge of 24.42% and a weekly increase of 4.45%. However, a slight dip of 1.76% is visible when analyzing the 24-hour change in Optimism’s TVL.

On the other hand, Ethereum, the leading blockchain network by TVL, has experienced a dip in trading activity, with its current volume at $710.17 million. The weekly trading volume of Ethereum, at $9.17 billion, falls significantly behind OP, showing a decline of 8.03% in a week.

Amidst this surge in Optimism’s trading activity, other major blockchain networks like Solana, Arbitrum, Polygon, and Avalanche have significantly declined their weekly trading volumes. Conversely, Tron, Linea, and Starknet are experiencing an upward trajectory in their weekly trading activities.

The recent surge in the Optimism platform’s trading volume may result from a vulnerability discovered in the KyberSwap decentralized exchange. This vulnerability led to a significant loss of $46.5 million, involving 10,049 WETH, 4,017 wstETH, and 3.98 million ARB tokens that were lost without a trace.

The recent surge in trading volume at Optimism’s decentralized exchange, fueled by the recent advancements in the cryptocurrency industry, is bringing about significant changes in decentralized finance and Ethereum’s scaling solutions. This trend is transforming the industry’s landscape and opening new opportunities for businesses and scholars to explore. 

Kyber Network Faces Cross-Chain Exploit, Resulting in $47 Million Loss

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Recent reports indicate that Kyber Network has fallen victim to an exploitation incident, resulting in losses exceeding $47 million. The attack has been officially acknowledged by Kyber Network, attributing the vulnerability to KyberSwap Elastic. In response, the network has strongly recommended all users swiftly withdraw their funds. KyberSwap Elastic, an upgraded version of the existing protocol KyberDMM (now referred to as KyberSwap Classic), incorporates the robust features of its predecessor while introducing the concept of concentrated liquidity.

The exploit is reported to have impacted all 15 chains associated with Kyber Network’s flagship product, KyberSwap. This crosschain decentralized exchange (DEX) and aggregator empower users to engage in intelligent trading practices, optimizing their potential earnings.

Kyber Network

Industry analysts suggest that the Kyber exploits involve flash loans coupled with a rounding issue. In each transaction, there is an initial ETH balance, followed by a loop of minting, redeeming, and swapping. On-chain investigators indicate that the problem lies in an approval issue within the Kyber aggregator. The hacker seems to be targeting the draining of Kyber liquidity pool (LP) funds. This implies that individuals engaged in trading or swapping may not face any risk, as the malicious actor appears focused on staked amounts within the liquidity pools. Traders are reassured that they are not vulnerable to this particular exploit. However, a cautionary note is issued to Kyber liquidity providers (LPs), advising them to promptly withdraw their stakes.

The Hacker Returns With A Message to Kyber Network

In a noteworthy development, the individual responsible for the breach has made a comeback, conveying a message that negotiations will commence in a few hours, once they are fully rested.

Kyber Network

Following the security breach, Kyber Network has recommended users to withdraw their funds as a precautionary measure and stressed the importance of avoiding phishing links. The KyberSwap aggregator, operating independently within the network, continues to function. Kyber Network is dedicated to issuing frequent updates as their team delves into the investigation of the incident. Ongoing recovery initiatives concentrate on comprehending the exploit’s mechanisms and implementing strengthened security measures to mitigate the risk of future incidents.

Binance’s Security Team Uncovers 2 KyberSwap Hackers

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Crypto exchange Binance has unearthed two suspects believed to be the hackers behind the $265k pilferage of the decentralized exchange KyberSwap. The dex built on liquidity protocol Kyber Network fell victim to a frontend exploit on Sept. 1.

After noticing “suspicious element, the protocol reportedly shut down its frontend at 8:24 AM UTC on the same date. Upon further investigation, it discovered “a malicious code” in its Google Tag Manager, which targeted “whale wallets with large amounts,” allowing the hacker to transfer funds to different addresses.

“The attack was identified and put a stop to after 2 hours of investigations,” Kyber Network tweeted. “This attack was an FE exploit and there is no smart contract vulnerability.”

On the same day, the protocol published a post updating users that it will compensate all fo the missing funds related to the exploit, and also sent out a message to the attacker that it had identified its addresses and all its suspected interactions.

Asking the hacker to contact them, the KyberSwap team offered a bug bounty of 15% which comes to roughly $40k of the total exploited funds.

Binance too began its own separate investigation and identified two suspects responsible for committing the online robbery. CEO Changpeng Zhao a.k.a CZ announced that the intel had been sent to the Kyber team and was also in touch with law enforcement agencies.

Community Members Praise Binance’s Action

Lauding Binance‘s proactive action, one community member likened the platform’s act to the role of a big brother.

Binance is now playing the role of a big brother in the crypto space. Binance has gone beyond securing its platform to securing the entire crypto ecosystem. There’s no other platform that has the will or the resources to help the crypto industry like Binance. Binance is doing well.

The biggest crypto exchange in terms of trading volume has recently come forward in helping Curve Finance users by recovering crypto assets worth about $450,000 stolen. The funds represented about 83% of the total amount stolen from users. 

Sharing the update, CZ also noted that the Curve Finance hacker transferred the stolen stash to Binance using different techniques to avoid the exchange’s security. However, the firm identified the transactions and froze the assets.