Decentralized Finance (DeFi) protocol The Kyber Network asked KyberSwap Elastic liquidity providers to withdraw funds after it discovered a potential security flaw.
DeFi protocol chirp“We have identified a potential security vulnerability and, as a precautionary measure, we strongly advise all liquidity providers to withdraw your funds on Elastic as soon as possible. Investigations are ongoing and no funds have been lost from users.”
Sharp drop in KyberSwap Elastic TVL
Kepper network too Certain KyberSwap Classic, the sister product of KyberSwap Elastic, is not affected by the vulnerability.
After the announcement, users withdrew more than $56 million from KyberSwap Elastic. According to data from DefiLlama, the total value locked (TVL) dropped from around $108 million to $52 million. This represents a drop of more than 50% within two hours of the announcement.
Although, as of this writing, there is no significant impact on the price of the Kyber Network Crystal (KNC) token. According to data from TradingViewKNC price is down about 0.6% Post warning tweets about vulnerabilities.
The project may have dodged the bullet this time, but in September 2022, it lost $265,000 due to a front-end exploit. Last month, a Kyber Swap user received only 0.05 USDT while swapping $2 million USD due to a routing error.
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