The suite of contracts implement a Dynamic Market Maker (DMM) based on UniswapV2. The main changes are the use of an amplification model for the pools inventory function and fees based on the recently traded volume.

Our main concerns are around the implementation of the amplification model. The paper Amplification Model describes the model in detail, however, only covers the cases when trades and  contribution of liquidity are done in a balanced manner in regard to the pools tokens. The actual implementation, however, allows unbalanced contributions. Three issues raised in the report are connected to unbalanced contributions.

One medium severity security issue has been identified during the assessment. Additionally one medium severity correctness issue and one medium severity as well as several low severity design issues have been reported

“Kyber Network is an on-chain liquidity protocol that aggregates liquidity from diverse sources for the best prices, enabling decentralized token swaps to be integrated into any application. Using this protocol, developers can build innovative payment flows and applications, including instant token swap services, decentralized payments, and financial DApps — helping to build a world where any token is usable anywhere.

Kyber is the most used and integrated protocol in decentralized finance (DeFi), with over US$1 billion worth of transactions facilitated since its inception. Kyber supports over 80 different tokens, and powers over 100 integrated projects including popular wallets Trust, Enjin, Argent, Eidoo, and the HTC Exodus smartphone, as well as DeFi platforms Nuo, DeFiSaver, InstaDApp, Set Protocol, Melon, and many others.”

(Source: Kyber Network media kit, April 2021)