Scope, findings, and severity

Graduate · enrolled learners

This lesson opens with KyberSwap Elastic, 22 November 2023.

What happened

KyberSwap Elastic used a concentrated-liquidity model, the same intricate tick-based math as other advanced exchanges. An attacker exploited a tick-boundary rounding flaw: by pushing a pool's price to a precise point at the edge of a liquidity range and back, they made the contract double-count liquidity, so a swap returned far more than it should. The margin that made it work was tiny, a check bypassed by less than a fraction of a trillionth, requiring exact calculation. The codebase had been audited before deployment, and the audits did not identify the flaw. About 48 million dollars was drained across six chains. The difficulty of auditing complex mathematical logic against an adversary with full access to the deployed code is the whole lesson.

The decision point

KyberSwap's users, if they read the audits, would have seen a codebase reviewed by professionals with findings addressed. What the audits did not contain was the one flaw that mattered, buried in tick-boundary arithmetic so intricate that finding it required the same precision the attacker used to exploit it. This is the limit of the findings table: it lists what the reviewers found, which is a function of where they looked and how deep, and the most dangerous bugs live in exactly the complex math that is hardest to review. Reading an audit's findings is not counting them; it is judging whether the reviewers went deep enough for the kind of code they were reviewing, and complex concentrated-liquidity math needs a depth few reviews reach.

Recorded loss

$48,000,000

Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.

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