On April 15, 2025, KiloEX lost $7M in an Oracle manipulation attack, exposing the risks of relying on centralized data in DeFi. By exploiting price Oracle flaws across multiple chains, the attacker drained millions in inflated asset values. This underscores the urgent need for decentralized, verifiable data. Orochi Network’s zkDatabase and zkDA Layer, powered by Zero-Knowledge Proofs, deliver strong protection and redefine secure DeFi infrastructure. What is happening with KiloEX ?
Last day, KiloEX, a decentralized exchange for trading perpetual futures, suffered a significant security breach due to oracle manipulation. The attacker exploited a vulnerability in KiloEX’s price oracle system, which provides external price data to smart contracts. By manipulating price feeds across multiple blockchain networks, including Base, BNB Chain, and Taiko, the attacker used flash loans to temporarily alter asset prices, inflating their positions’ value and withdrawing approximately $7M in profits before the platform could react.
KiloEX has since suspended operations and is collaborating with security firms like Seal-911, SlowMist, and Sherlock, as well as networks like BNB Chain and Manta Network, to trace and recover the stolen funds. Blockchain analysis from PeckShield estimated losses at $7.5M, with $3.3M lost on Base, $3.1M on opBNB, and $1M on BSC, confirming the attack’s scale KiloEx Loses $7M in Apparent Oracle Manipulation Attack.
Oracle Market Vulnerabilities: Theft and The Need for Transformation
Oracles are essential in DeFi, acting as bridges that relay external data, such as asset prices, to blockchain smart contracts. This data is critical for executing trades, managing liquidity, and ensuring fair market operations. However, traditional oracles often rely on centralized data feeds, introducing single points of failure and susceptibility to manipulation. The KiloEX attack demonstrated how attackers can exploit Oracle vulnerabilities, using tools like Tornado Cash to obscure transaction trails and manipulate prices, leading to significant financial losses and eroding user trust. The oracle market faces a critical challenge ensuring data integrity and security while maintaining decentralization. Centralized oracles, while efficient, are prone to manipulation, as seen in KiloEX’s case, where the attacker altered price feeds to inflate values. This vulnerability underscores the need for decentralized, verifiable data solutions to enhance DeFi security.
Enhancing Security with Verifiable Data
To address oracle manipulation, DeFi platforms like KiloEX should transition from centralized oracles to decentralized, verifiable data systems. This involves adopting cryptographic techniques, such as zero-knowledge proofs (ZKPs), to ensure data authenticity and integrity. By reducing reliance on third-party data feeds, platforms can mitigate manipulation risks and enhance trust. The solution lies in leveraging technologies that provide provable data correctness, ensuring that smart contracts operate on accurate and tamper-proof information.
Orochi Network positions itself as a leader in solving oracle-related challenges through its Verifiable Data Infrastructure, particularly with zkDatabase and zkDA Layer. These technologies leverage Zero-Knowledge Proofs to ensure data integrity, privacy, and scalability, offering a potential fix for the vulnerabilities exposed in the KiloEX incident.
zkDatabase: Described as a distributed off-chain database, zkDatabase uses ZKPs to enable verifiable data queries and transactions without revealing the underlying data. It combines modern noSQL architecture with cryptographic modules, ensuring provable data integrity.
For DeFi, zkDatabase can serve as a secure oracle data source, preventing manipulation by providing cryptographically verified data. It supports Web3 integration and enterprise applications, with features like fast processing and reduced costs, ensuring compliance through complete database encryption
zkDA Layer: As the World’s First Zero-Knowledge Data Availability Layer (zkDA Layer), zkDA Layer ensures data availability and verification using ZKPs. It supports ZK-data-rollups for scalable, private applications and provides a Verifiable Data Pipeline with cryptographic proofs, this layer offloads the risk of single points of failure, making it ideal for securing oracle data feeds in DeFi. By ensuring data is both available and verifiable, zkDAlayer reduces manipulation risks, as seen in the KiloEX attack.
Conclusion
The KiloEX $7M theft due to oracle manipulation on April 15, 2025, underscores the urgent need for secure, decentralized oracle solutions in DeFi. Orochi Network’s zkDatabase and zkDA Layer, leveraging Zero-Knowledge Proofs, offer a promising path forward by ensuring verifiable data integrity and reducing manipulation risks. As the industry moves toward greater security and trust, these technologies seem likely to play a critical role in shaping the future of Web3.
Risk Disclaimer: This article is purely objective and for illustrative purposes only, with absolutely no intent of opposition or challenge in any form!
