KiloEx Was Stolen, KILO Token Plunged: A Heavy Lesson in DeFi Security

On April 14, 2025, the decentralized derivative trading platform KiloEx suffered a devastating hack, losing approximately $7.4 million in assets, involving multiple blockchains such as BNB Chain, Base, opBNB, and Taiko.

This security disaster not only severely hit the platform’s operation, but also led to a cliff-like plunge in the price of its native token KILO, with a market value shrinking by nearly 80%. The incident has caused community panic and sounded the alarm for security issues in the DeFi industry.

Attack Details: Intricately orchestrated looting

According to the preliminary analysis of blockchain security agencies PeckShield, Cyvers, and SlowMist, hackers launched attacks using the fatal vulnerability of the KiloEx price oracle. By manipulating asset pricing, hackers were able to complete high-value arbitrage in a very short period of time.

For example, on the Base chain, hackers are offering $100 ETH price Opening a position, then closing it at a price of $10,000, netting $3.12 million in a single trade. Similar tactics were repeated on other chains, resulting in total losses including $3.3 million on Base Chain, $3.1 million on opBNB Chain, $1 million on BNB Chain, and a small amount of assets on Taiko Chain.

The attacker’s use of funds mixed through Tornado Cash shows a high degree of premeditation. On-chain data shows that some of the stolen assets have been transferred to multiple anonymous addresses, making recovery extremely difficult. The KiloEx team quickly suspended all platform trading activities after the incident in an attempt to curb further losses and urgently contacted BNB Chain, Manta Network, and security partners (such as Seal-911, Sherlock) to conduct an investigation.

The official statement said that the core vulnerability has been fixed and plans to incentivize the community to assist in recovering funds through a bounty program. However, as of April 15th, KiloEx has not yet published a detailed vulnerability report or a clear compensation plan, and the community’s anxiety continues to brew.

KILO Token big dump: The Cost of Trust

KiloEx completed the Token Generation Event (TGE) on March 27, 2025, backed by well-known institutions such as Binance Wallet, PancakeSwap, etc. The KILO token performed well in the early stages, reaching a peak price of $0.1648, with a market capitalization exceeding $11 million at one point.

However, the theft incident came as a bolt from the blue, completely shattering market confidence. After the incident was exposed, the price of KILO plummeted by over 30% within a few hours, followed by a continuous decline. As of April 15th, the price of KILO dropped to $0.0353, a decrease of about 78% from its all-time high, with a circulating market cap of only about $7.5 million.

What’s even more worrying is that the circulating market value of KiloEx is far from enough to cover the $7.4 million loss. On social media, users have questioned the project’s solvency, with some calculating that even if the team sells all unlocked tokens, it would still be difficult to fill the funding gap. The community’s anticipation has turned into disappointment, with some investors even predicting that KILO may fall close to zero. On platform X, a user bluntly stated, ‘If KiloEx does not present a credible compensation plan, the project is basically hopeless.’

DeFi Security Crisis: The Achilles’ Heel of Oracles

The KiloEx theft incident exposed a major flaw in the design of price oracles in the DeFi ecosystem. Price oracles are core components of DeFi platforms, responsible for providing real-time price data of off-chain assets, directly impacting the fairness of trading and liquidation.

However, its complexity and reliance on external data sources make it a prime target for hacker attacks. Cyvers analysis points out that the vulnerability of KiloEx stems from the “unverified identity of the trusted forwarder caller”, a ‘simple’ mistake that led to disastrous consequences.

This is not the first time DeFi has been hit by oracle issues. Since 2024, multiple platforms have lost hundreds of millions of dollars due to similar vulnerabilities, highlighting the industry’s lack of security audits and technical standardization. After the KiloEx incident, experts called for DeFi projects to strengthen the decentralized design of oracles, introduce multi-factor verification mechanisms, and conduct regular third-party audits to reduce the risk of single point of failure.

Market and community response

The crisis at KiloEx quickly triggered a chain reaction. After the platform suspended trading, on-chain transaction volume plummeted, and liquidity almost dried up. Some users attempted to withdraw funds, only to find their operations restricted, questioning the transparency of the project team. On platform X, discussions about ‘KiloEx being hacked’ remain heated, with the hashtag #KiloExHack trending in the crypto community. Some users shared screenshots of their losses, calling for regulatory intervention; while others expressed disappointment in the overall security of DeFi, believing that ‘behind high returns always lies high risk’.

Competitors’ platforms take the opportunity to attract users. PancakeSwap has released a statement emphasizing its multi-layer security mechanism, attempting to retain KiloEx’s lost users. Industry analysts predict that in the short term, investors may lean towards mature centralized exchanges or DeFi protocols with higher security. The road to recovery for KiloEx will be exceptionally difficult.

The road ahead: the challenge of rebuilding trust

For KiloEx, the top priority now is to regain user trust. The team needs to release a transparent incident report as soon as possible, detailing the reasons for the vulnerability, the measures taken for fixing it, and the progress of fund recovery. At the same time, developing a feasible compensation plan is crucial—whether it’s through insurance funds, token buybacks, or introducing external investments, sincerity needs to be demonstrated to the community. Furthermore, KiloEx must upgrade its security architecture, such as introducing decentralized oracles like Chainlink, or collaborating with more security companies to completely eliminate similar risks.

However, time is not on KiloEx’s side. The competition in the DeFi industry is extremely fierce, user loyalty is low, and the cost of rebuilding trust once it collapses is extremely high. Historically, there have been many DeFi projects that have fallen due to security incidents. Whether KiloEx can break this curse depends on the team’s execution and the market environment.

Conclusion

KiloEx was stolen $7.4 million, and KILO Token plummeted by nearly 80%, which is not only a financial disaster but also a profound warning to the security of the DeFi industry. In the frenzy and coexistence of risks in the crypto world, technical vulnerabilities can instantly destroy the foundation of a project. The future of KiloEx depends on whether it can act quickly and rebuild trust.