Crypto Flexs
  • DIRECTORY
  • CRYPTO
    • ETHEREUM
    • BITCOIN
    • ALTCOIN
  • BLOCKCHAIN
  • EXCHANGE
  • ADOPTION
  • TRADING
  • HACKING
  • SLOT
Crypto Flexs
  • DIRECTORY
  • CRYPTO
    • ETHEREUM
    • BITCOIN
    • ALTCOIN
  • BLOCKCHAIN
  • EXCHANGE
  • ADOPTION
  • TRADING
  • HACKING
  • SLOT
Crypto Flexs
Home»ADOPTION NEWS»Abuse of KyberSwap’s concentrated liquidity feature resulted in a loss of $46 million
ADOPTION NEWS

Abuse of KyberSwap’s concentrated liquidity feature resulted in a loss of $46 million

By Crypto FlexsNovember 25, 20233 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Abuse of KyberSwap’s concentrated liquidity feature resulted in a loss of  million
Share
Facebook Twitter LinkedIn Pinterest Email

November 23, 2023, Decentralized Finance (DeFi) space is shaken This was accomplished through a carefully planned exploit against KyberSwap, a leading decentralized exchange (DEX). The exploit, which Doug Colkitt, founder of Ambient Exchange, called “the most complex and carefully designed” he had ever seen, resulted in losses of approximately $46 million.

To understand the complexity of the exploit, you must first understand ‘concentrated liquidity’. This feature, commonly used in DEXs such as KyberSwap, Uniswapand Ambient allow liquidity providers to increase capital efficiency by allocating assets within specific price ranges. However, this mechanism also introduces unique vulnerabilities that were exploited in this incident.

The attacker’s strategy centered around KyberSwap’s Ethereum ETH/wstETH pool. The attacker manipulated the price dynamics of the pool, starting with a flash loan of 10,000 wstETH (worth approximately $23 million). By injecting 2,800 wstETH ($6 million) into the pool, we significantly distorted the ETH to wstETH price ratio. This action moved the price of the pool into a range where there was little existing liquidity, setting the stage for abuse.

After artificially altering the price of the pool, the attacker issued small amounts of liquidity over a narrowly defined price range. After that, they executed two important exchanges. The first swap sold large amounts of wstETH for a minimal amount of ETH, driving the price down significantly. The second swap reversed this and bought back a larger amount of wstETH for an even larger amount of ETH. This series of transactions, under normal circumstances, should have resulted in a negligible net gain due to the independent nature of the transactions.

However, due to a mathematical flaw in the KyberSwap contract, these transactions did not take place as expected. The contract failed to accurately account for changes in liquidity during the swap, resulting in a misrepresentation of available liquidity. The flaw allowed attackers to extract significantly more wstETH than they initially deposited, effectively creating an “infinite funds glitch.”

A key point of failure was the handling of the contract’s updateLiquidityAndCrossTick function. During the first swap, this function, which adjusts the liquidity value of the curve based on the LP range position at a specific price tick, was not called correctly. As a result, the pool’s liquidity was not updated accurately, allowing attackers to leverage this oversight to their advantage. Precisely manipulating swap quantities and prices indicates an attacker’s deep understanding of the underlying contract mechanisms.

This incident has deep implications for the DeFi ecosystem, especially regarding the security of smart contracts. Colkitt noted that the attack is specific to Kyber’s implementation and does not necessarily pose a threat to other DEXs with concentrated liquidity, but emphasized the need for more stringent security measures and vulnerability assessments in DeFi protocols. The precision and sophistication of the attack also highlights the evolving nature of threats in the DeFi space.

The KyberSwap exploit is a stark reminder of the complexities and vulnerabilities inherent in DeFi. This highlights the importance of ongoing security audits and the need for the DeFi community to remain vigilant against these sophisticated attacks. As DeFi continues to grow and evolve, security measures are also needed to protect infrastructure and users.

Image source: Shutterstock

Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

Gala Games improves leader board rewards and introduces preference systems.

June 20, 2025

Ether Leeum Whale starts a $ 11 million leverage betting in the 30% increase in ETH prices.

June 12, 2025

AI starts a cost -effective batch API for LLM request.

June 12, 2025
Add A Comment

Comments are closed.

Recent Posts

Stably Introduces Stablecoin Development & Advisory Services For Institutions & Enterprises

June 24, 2025

Senior Trader Uses XRP To Start Bitcoin (BTC) Mining Machine, Earning $8,857 A Day

June 24, 2025

WF Holding Ltd Announces Entry Into The Digital Cryptocurrency Field

June 24, 2025

Crypto Scam Markets thrives again after attempting to clean up Telegram.

June 24, 2025

On the 7th, NFT transaction sales volume of immutable tower

June 24, 2025

Sequans starts $ 384M Bitcoin Treasury Initiative with Swan Bitcoin Partnership.

June 23, 2025

Dogecoin (DOGE) after collision

June 23, 2025

GAP 3 Partners FZCO Becomes Dubai’s First Regulated Virtual Asset Investment Advisor With Operational License From VARA

June 23, 2025

R0AR Lists On BitMart: $1R0R Makes CEX Debut

June 23, 2025

Polemos Launches $PLMS Token On MEXC And Uniswap, Advancing Web3 Gaming Infrastructure

June 23, 2025

Bitcoin will protrude again, and Arthur Hayes says after dip to less than $ 100K.

June 23, 2025

Crypto Flexs is a Professional Cryptocurrency News Platform. Here we will provide you only interesting content, which you will like very much. We’re dedicated to providing you the best of Cryptocurrency. We hope you enjoy our Cryptocurrency News as much as we enjoy offering them to you.

Contact Us : Partner(@)Cryptoflexs.com

Top Insights

Stably Introduces Stablecoin Development & Advisory Services For Institutions & Enterprises

June 24, 2025

Senior Trader Uses XRP To Start Bitcoin (BTC) Mining Machine, Earning $8,857 A Day

June 24, 2025

WF Holding Ltd Announces Entry Into The Digital Cryptocurrency Field

June 24, 2025
Most Popular

Elacity partners with Particle Network and Beatfarm to bring streamlined Web3 to music superfans

August 11, 2024

MicroStrategy acquired 15,350 BTC ahead of Nasdaq-100 listing.

December 16, 2024

Dencun Destroys Ethereum “Ultra Sound Money” Narrative: CryptoQuant

May 9, 2024
  • Home
  • About Us
  • Contact Us
  • Disclaimer
  • Privacy Policy
  • Terms and Conditions
© 2025 Crypto Flexs

Type above and press Enter to search. Press Esc to cancel.