Kyber Network Sounds Alarm Bells, Calls for Immediate Fund Withdrawal

Kyber Network, the developer of the Kyberswap Elastic decentralized crypto exchange, announced on April 17 that there was a potential vulnerability in the exchange’s contracts.

As a precaution, all liquidity providers have been instructed to withdraw their cash as soon as possible. The vulnerability is limited to Kyberswap Elastic money, and no funds were lost, according to the developer.

Kyberswap Elastic is a decentralized exchange that allows liquidity providers to provide “concentrated liquidity” by setting a price cap and floor for the tokens they deposit into the pool. LPs earn fees only if the price remains within the range they have established. Kyberswap Classic, on the other hand, did not support concentrated liquidity.

The developer also announced that farming incentives have been temporarily paused and will continue until a new smart contract can be installed. An update to the community on when funds can be safely placed back into the protocol will be provided shortly.

Investigations into the vulnerability are still ongoing, and the protocol’s native token, KNC, saw a 6% drop following the news. However, its value has since recovered to the same point as before.

It’s worth noting that Kyberswap’s user interface was hacked in September 2022, resulting in the theft of $265,000 in cryptocurrency. The recent vulnerability announcement is not related to that incident, according to the developer.