KyberSwap Reveals Possible Vulnerability and Urges Liquidity Providers to Withdraw Funds Immediately

Updated: 18 April 2023

Disclosure

Don’t invest unless prepared to lose all the money you invest. This is a high-risk investment, you shouldn’t expect to be protected if something goes wrong.

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Kyber Network, the developer of KyberSwap Elastic, has announced that there is a potential vulnerability in the exchange’s contracts. As a result, Kyber Network has advised all liquidity providers to remove their funds from the platform as soon as possible.

We have identified a potential vulnerability, and as a precaution, we strongly advise all liquidity providers to withdraw your funds on Elastic as soon as possible,” the statement on Twitter reads.

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Attention KyberSwap Elastic Liquidity Providers:
We have identified a potential vulnerability, and as a precaution we strongly advise all Liquidity Providers to withdraw your funds on Elastic as soon as possible.

Investigations are ongoing and no user funds are lost.

— Kyber Network (@KyberNetwork) April 17, 2023

No Funds Were Lost

According to the Kyber Network, investigations are ongoing, and the network stated that no funds were lost. But, it has advised LPs to withdraw their funds as a precaution. The vulnerability only affects Kyberswap Elastic funds and not Kyberswap Classic smart contracts, according to the developer.

KyberSwap Classic remains unaffected. We will provide further details on the situation shortly and announce when KyberSwap Elastic is re-enabled. We apologize for the inconvenience caused.

Kyber Network has temporarily suspended farming rewards until they can deploy a new smart contract. All rewards earned prior to April 18, 2023, 11 p.m. (GMT +7) have already been disbursed and are unaffected by this pause. The developer has stated that it will update the community soon with an explanation when funds can be safely deposited back into the protocol.

KyberSwap Elastic is a decentralized exchange that allows LPs to provide “concentrated liquidity.” Instead of requiring them to provide liquidity for any price point, it allows them to decide on a price ceiling and price floor for the tokens they deposit into the pool. If the price moves below the floor or above the ceiling, LPs no longer receive fees. However, they receive higher fees if the price stays within the range they have set.

KyberSwap Lost $265,000 Worth of Crypto to Hackers in September

This announcement comes after the user interface for KyberSwap was hacked in September 2022. The hackers stole Aave Matic interest-bearing USDC (AMUSDC) tokens worth $265,000 in four transactions. The vulnerability in the exchange’s contracts is a cause for concern for the community, and many LPs have already started withdrawing their funds as advised.

🚨 DeFi Exchange KyberSwap Suffers $265,000 Frontend Exploit

— Crypto News (@CryptoNews_HQ) September 2, 2022

Decentralized exchanges have become increasingly popular in recent years because of their transparency and open nature. However, they are not immune to vulnerabilities, as seen with the recent announcement by Kyber Network. The onus is on developers to ensure that their protocols are secure and to alert their users of any potential risks.

The announcement by Kyber Network is a reminder to investors to always be cautious when investing in the crypto market. While the crypto market has experienced tremendous growth in recent years, it is still a highly volatile and unpredictable market. Investors should always do their own research and ensure that they are investing in secure and trustworthy platforms.