Kyber Network recently disclosed a potential vulnerability in the exchange’s contracts. For your information, Kyber Network is the developer of the Kyberswap Elastic – a decentralized crypto exchange. While no funds have been lost, Kyber Network has advised users to remove their funds as a measure until the issue is resolved. The Kyber Network team has confirmed that the network was not affected by the vulnerability. However, they consider the risk too high for the moment for the users to keep their funds there.
Kyberswap Elastic is a decentralized exchange that enables liquidity providers to offer “concentrated liquidity.” They do this by setting a price ceiling and price floor for tokens deposited into the pool. When the price falls below the floor or goes above the ceiling, liquidity providers no longer receive fees. Yet, they can earn higher fees if the token price remains within their specified range.
In response to the potential vulnerability, Kyber Network has temporarily suspended farming rewards. Until a new smart contract can be deployed, users are advised to not deposit anything. Rewards earned before April 18, 2023, have already been distributed. So, the suspension won’t affect any of the users who benefited from the distributions. The developers plan to update the community soon in regards to when it is safe to deposit funds back into the protocol.
This incident is not the first security issue faced by Kyberswap. In September 2022, the platform’s user interface was hacked. This resulted in an attacker escaping with $265,000 worth of crypto.
The Risks Of Decentralized Finance Portrayed By The Kyber Network
The team of Kyber network is advising its users to remain vigilant in the next few weeks. While the team is referring to their current situation, users must remain vigilant whenever they use decentralized finance (DeFi) applications. This is because the amount of attacks experienced by decentralized applications (DApps) is growing in recent months. With that being said, users must be informed at all times about the developments happening in the DeFi platforms they use.
In a broader context of decentralized finance (DeFi), risks related to security were always present. As developers work towards decreasing the vulnerabilities of their platforms, users must remain cautious. Despite the current issues, the DeFi sector is still accumulating popularity. Nevertheless, one of the hardest challenges faced by DeFi projects is building trust and ensuring the safety of their users.