KyberSwap Discovers Critical Bug In ‘Elastic’ AMM
TVL Drops 95% After LPs Were Asked To Withdraw Liquidity
By: Tarang KhaitanDeFi News
Kyber Network, a decentralized exchange and aggregator operating on multiple chains, instructed liquidity providers (LPs) to withdraw their liquidity from KyberSwap’s Elastic platform after discovering an undisclosed vulnerability on Apr. 17.
The team said that no user funds were lost. LPs were quick to withdraw their assets, and the exchange’s TVL dropped to under $5M from $108M prior to the announcement.
Kyber TVL, Source: The Defiant Terminal
The KyberSwap Classic platform was unaffected and remains operational, while KyberSwap Elastic will be redeployed with an upgraded smart contract. Yield farming rewards have been paused as of Apr. 18.
Kyber Network’s KNC governance token fell 8% on the news.
KNC Price, Source: The Defiant Terminal
LPs that do not remove liquidity will have their assets returned to their wallets but will lose any unclaimed rewards.
KyberSwap Elastic was launched in July 2022, featuring improved capital efficiency to compete with Uniswap V3.
In September 2022, Kyber Network suffered a front-end attack which saw $265,000 of users’ funds being lost. The team said that they would compensate affected users.