How Does KiloEx Work?
A perpetual futures exchange deployed on 4 blockchains where you can bet on crypto prices with up to 100x leverage. It holds $50M in liquidity vaults. Its D grade reflects a confirmed $7M hack in April 2025 where attackers manipulated price feeds on multiple chains simultaneously, exposing fundamental security failures.
TVL
$4M
Sector
Derivatives
Risk Grade
D+
Value Grade
D-
Core Mechanisms
4.3.2
Perpetual futures DEX: allows traders to long/short crypto assets with leverage (up to 100x) without expiry dates, using oracle price feeds for settlement
KiloEx offers perpetual swaps (perps) similar to GMX, dYdX, and centralized exchanges like Binance. Traders deposit collateral and can open leveraged positions. Profits/losses settle against oracle prices. Standard perp DEX design with no novel mechanisms.
6.1.1
Oracle price feeds for perpetual settlement: uses external oracles (likely Chainlink or Pyth) to determine asset prices for position PnL calculations and liquidations
KiloEx relies on external oracles to determine when traders are profitable/liquidated. The April 2025 exploit showed KiloEx had insufficient access controls: attackers manipulated oracle price inputs to create phantom profits. Standard oracle integration pattern, but implemented insecurely.
3.2.1
Liquidity vaults: LPs deposit USDC/stablecoins to provide liquidity for trader positions, earning fees from trading activity and funding rates
KiloEx vaults act as counterparty to all trader positions. When traders profit, vaults pay out; when traders lose, vaults capture collateral. This creates 'house always wins' dynamics but also exposes LPs to tail risk during extreme volatility or exploits.
4.3.3
Liquidation engine: automatically closes underwater positions when collateral falls below maintenance margin, protecting vault solvency
KiloEx liquidation bots monitor positions and trigger liquidations when collateral < maintenance margin (varies by leverage). During extreme volatility or chain congestion, liquidations can fail, leaving vaults with bad debt. Standard liquidation mechanism with known failure modes.
Cross-Chain/Multi-Deployment
Multi-chain deployment: identical contracts on BNB Chain, Base, opBNB, and Taiko to capture users across EVM ecosystems
KiloEx deployed the same contracts on 4+ chains to expand user base. This amplifies risk: a single vulnerability exists on all chains simultaneously. The April 2025 exploit drained vaults on multiple chains in one attack. Standard multi-chain deployment strategy with known security tradeoffs.
How the Pieces Interact
The April 2025 exploit demonstrated attackers can inject false prices into KiloEx's oracle system using flash loans. By borrowing large amounts, manipulating price feeds to report absurdly low/high prices, opening leveraged positions, and immediately withdrawing 'profits', attackers can drain vaults before price corrections occur.
Deploying identical vulnerable contracts on 4+ chains allows attackers to exploit all chains simultaneously (or sequentially before team responds). The April 2025 attacker used Tornado Cash-funded wallets on each chain, suggesting premeditation. This multiplies losses from single vulnerability 4x or more.
Vaults act as counterparty to all trades. When oracle manipulation creates false profits for attackers, vaults pay out real money for fake trades. Unlike centralized exchanges where order books protect against this, KiloEx vaults have no defense if oracle integrity is compromised.
When BTC/ETH crash rapidly, KiloEx liquidation bot must compete with thousands of other DeFi liquidation bots for block space. Gas price spikes and congestion can delay liquidations by minutes, allowing highly leveraged positions (50x-100x) to accumulate negative equity (bad debt) that gets socialized to vault LPs.
Offering 100x leverage means a 1% adverse price move liquidates positions. If liquidations fail even briefly, bad debt accumulates exponentially. KiloEx appears to lack a robust insurance fund (similar to BitMEX or dYdX models), meaning vault LPs absorb socialized losses during black swan events.
What Could Go Wrong
- Exploited for $7M in April 2025 via oracle access control vulnerability allowing price manipulation; attack succeeded across BNB Chain, Base, and opBNB simultaneously, indicating systematic security failures
- Oracle dependency: KiloEx's perpetual pricing mechanism relies entirely on external price feeds with insufficient access controls, creating single point of failure for protocol solvency
- Cross-chain attack surface: deploying identical contracts on 4+ chains (BNB, Base, opBNB, Taiko) amplifies risk, as single vulnerability can be exploited multiple times before patches deploy
Cross-Chain Oracle Manipulation Contagion
ElevatedTrigger: Attacker exploits oracle access control vulnerability across KiloEx's multi-chain deployment (BNB Chain, Base, opBNB, Taiko), draining vaults simultaneously through coordinated price manipulation
- 1.Attacker identifies oracle price feed access control flaw allowing arbitrary price injection (similar to April 2025 $7M exploit), uses Tornado Cash-funded wallets on all 4 chains — Attacker opens leveraged positions at manipulated prices (e.g., ETH at $100) across all KiloEx chains simultaneously, creating phantom profits in all vaults
- 2.Flash loan-funded manipulation drains $7M+ from BNB Chain vault, repeats attack on Base, opBNB, and Taiko vaults before KiloEx can pause contracts — Total losses exceed $20M across all chains; KiloEx vault reserves depleted to point where remaining traders cannot withdraw positions
- 3.KiloEx offers attacker 10% bounty to return 90% of funds (standard DeFi exploit negotiation), attacker refuses and launders through mixers — KiloEx must decide: socialize losses among remaining users, or shut down protocol permanently, betraying traders still holding positions
- 4.News spreads that KiloEx's oracle system had identical vulnerability across all chains, indicating systematic failure in security architecture and deployment process — Other perp DEXes (GMX, Kwenta, Gains Network) face scrutiny over oracle security; institutional traders avoid decentralized perpetuals, stymieing sector growth
Risk Profile at a Glance
Overall: D+ (58/100)
Lower score = safer