Kyber Network, the developer of Kyberswap Elastic decentralized crypto exchange, issued an announcement on April 17, 2023, stating that there was a potential vulnerability in the exchange’s contracts.
As a precautionary measure, all liquidity providers have been advised to withdraw their cash as soon as possible.
While no funds were lost due to the vulnerability, the developer recommended that liquidity providers (LPs) withdraw their cash as a precautionary measure.
Only Kyberswap Elastic money is at risk, and the vulnerability does not exist in Kyberswap Classic smart contracts, according to researchers.
In a separate post, the team announced that farming incentives were temporarily suspended until a new smart contract could be installed. Any prizes earned prior to April 18, 2023, 11:59 p.m. (GMT+7) had already been distributed and were unaffected by this suspension.
The developer also stated that it would provide an update to the community soon on when funds could be safely placed back into the protocol.
KyberSwap Elastic is a decentralized exchange (DEX) that enables LPs to provide “concentrated liquidity,” according to its documentation. Instead of requiring them to offer liquidity at any price point, it allows them to select a price cap and floor for the tokens they deposit into the pool.
LPs no longer earn fees if the price falls below the floor or rises over the ceiling, but they do receive additional compensation if the price remains within the range they have established. The previous version of the DEX, KyberSwap Classic, did not support concentrated liquidity.
