Customized Liquidity Positions With Auto-Compounding Yields
As the AMM space matured, increasingly sophisticated yield generation strategies created a strong demand for customized liquidity positions whereby liquidity providers were able to specify a price range for their liquidity positions. Realizing this demand, KyberSwap Elastic iterated upon the capital amplification capabilities of its Classic counterpart by incorporating emerging concentrated liquidity concepts popularized by Uniswap V3. Through fusing the benefits of each, KyberSwap Elastic enables liquidity providers to determine their preferred liquidity price ranges while still maximizing returns through greater capital efficiency as well as the auto-compounding of yields.
Through these improved LP incentives, KyberSwap Elastic is also able to further reduce slippage for traders as market forces will incentivize liquidity to be concentrated within the most actively traded price ranges. LPs are able to compound their finely tuned risk-adjusted returns while simultaneously encouraging greater market stability through reduced slippage risks for traders.
On 17 April 2023, KyberSwap validated a vulnerability reported by a whitehat hacker which could result in double-counting of liquidity deposits under a specific condition. Elastic pools and farms were paused with all user funds being safely withdrawn from the identified contracts.
As of 25 May 2023, this has now been fixed with all the relevant Elastic protocol and farm contracts updated. Please refer to Elastic Legacy for more details.