KiloEx Resumes Operations, Compensates Users After $8.44M Hack

KiloEx, a decentralized exchange (DEX) backed by YZi Labs, is set to resume operations following a security incident that occurred on April 14, 2025. The platform was exploited by a hacker, resulting in a significant loss of funds. Despite the setback, KiloEx has announced a comprehensive compensation plan for affected users, demonstrating its resilience in the face of adversity.

The compensation plan, detailed in a Medium post, outlines specific measures for traders, Hybrid Vault stakers, and VIP users. Traders whose positions remained open during the platform suspension will have their positions remain active upon resumption. However, those whose losses increased or profits decreased during this period will be fully compensated for the difference. The platform will calculate compensation based on the time of resumption, urging traders to close their positions promptly to avoid discrepancies between actual profit and loss (PnL) and the compensation amount.

Hybrid Vault Stakers will see their principal and earnings during the suspension period remain unaffected, as the platform has recovered and reinjected all stolen funds into the Hybrid Vault. Additionally, KiloEx will launch a Special Yield Boost Campaign, offering users an additional 10% APY on top of the base platform yield, paid out in USDT. This incentive aims to restore user confidence and encourage continued participation in the platform's staking program.

VIP users affected by the hack will receive a +1 level upgrade, excluding VIP7 users. All affected users, including VIP7, will also benefit from a 30-day VIP status protection period. The VIP status was determined based on a real-time snapshot taken at the time of the security incident, ensuring fairness and transparency in the compensation process.

KiloEx's resumption plans follow a thorough security audit by SlowMist, a blockchain security firm. The audit, along with collaborations with security partners and the implementation of a bounty program, has enabled the platform to track stolen funds and recover user assets. SlowMist played a crucial role in communicating with the attacker via on-chain messages, leading to the recovery of $8.44 million in stolen funds. This incident highlights the importance of on-chain messaging as a communication tool in blockchain security.

Despite the positive developments surrounding KiloEx's resumption and compensation plans, its native token, KILO, has experienced a decline of over 5%. This drop in value may be attributed to lingering concerns among investors regarding the platform's security and the potential for future incidents. However, KiloEx's proactive approach to addressing the hack and compensating affected users demonstrates its commitment to rebuilding trust and maintaining its position in the competitive DEX market.