Kyber Network warns liquidity providers of 'potential vulnerability' in Elastic platform

Kyber Network, a popular decentralized finance protocol, issued a warning to users who may have have funds deposited in its Elastic platform due to a potential security vulnerability.

The vulnerability identified in the Elastic product led Kyber Network to urge its users to withdraw their funds as a precautionary measure. The project stated that investigations are ongoing, and no user funds have been lost.

“We have identified a potential vulnerability and strongly advise all Liquidity Providers to withdraw your funds on Elastic as soon as possible,” the Kyber team said. “Investigations are ongoing, and no user funds are lost.”

Elastic is a decentralized exchange platform from Kyber that lets users swap tokens and allows liquidity providers to deposit tokens and receive a yield on their deposits.

For the time being, the team has paused users from adding liquidity. The Kyber team added it would provide further details on the situation soon when KyberSwap Elastic is re-enabled. Another exchange product offered by the project, KyberSwap Classic, remains unaffected, it added.

Elastic platform locked value declines

Following the announcement, the total value locked in the Elastic platform dropped to nearly $52 million from $105 million earlier, according to DefiLlama. This is likely due to users withdrawing their funds after the warning. 

KyberSwap Elastic incorporates the concentrated liquidity concept that was popularized by the Uniswap v3 protocol, allowing liquidity providers to specify price ranges for their liquidity positions.