Case Studies
Case Study on KyberSwap
ARC's technology might have averted the $48 million loss in the KyberSwap hack.
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Executive
Summary:
This case study examines a significant hack on KyberSwap Elastic in November 2023, where the attacker exploited a precision error in the decentralized exchange protocol, leading to a loss of approximately $48 million.
Problem
Statement:
In the hack, KyberSwap faced a critical challenge due to a vulnerability in its concentrated liquidity calculations. This flaw was exploited by an attacker, who manipulated pool liquidity through a flash loan and capitalized on arithmetic errors, resulting in a substantial financial loss.
Analysis:
The decentralized exchange aggregator operating across multiple chains, was compromised through a reentrancy attack on its smart contract, resulting in a loss of around $48 million over several networks and a 90% decline in its total value locked (TVL).
Results:
The attack resulted in a significant loss for KyberSwap, emphasizing the importance of rigorous security measures in DeFi protocols. It also illustrates the potential effectiveness of tools like Archimedes' audit feature in identifying such vulnerabilities.
Conclusion:
The KyberSwap incident underscores the crucial need for advanced security measures in the DeFi space. It demonstrates how comprehensive auditing tools can play a vital role in preventing similar exploits and ensuring the security of decentralized protocols.
