Kava Halted After Yield Farming Bug Discovered in Latest Release

The security committee for Kava Labs, the company behind a new-generation DeFi platform, has halted the chain to address an inflation bug that over distributes yield farming rewards in its latest release.

• To patch the bug and re-start the Kava chain, the development team are asking validators to revert to an earlier version of the software, Kava-4, before updating to the new Kava-6 version in roughly 12 hours, according to Messari.
• Kava 5, the software version containing the bug, was released this week, shortly before the bug was discovered.
• The platform's safety committee shut down the Kava-5 chain at block 459. Kava Labs is planning to replay the state and determine the source of the error.
• “User funds are not affected. A fix is currently being worked on. Will update shortly,” a Kava Labs tweet reads.
• According to Messari, the "high severity bug" was paying out liquidity providers on the platform "well above expected values."
• These specific payouts are timelocked, the post explains, so they could not be sent to exchanges, just claimed by their users.
• "Kava Labs' monitoring suite picked up the bug within minutes of Kava 5 launch, way before any HARD claims could actually be distributed – this was by design," said Scott Stuart, co-founder of Kava Labs, in a statement shared with CoinDesk.
• Kava is a blockchain built on the Tendermint consensus algorithm and is also a participant in the Cosmos blockchain interoperability project.
• Kava's HARD protocol is its cross-chain money market that allows users to lend, borrow, and earn with a variety of digital assets.
• The Binance-backed chain went live last year and offers yield farming applications similar to those found in Ethereum’s DeFi ecosystem.

Updated Thursday, March 4, 2021, at UTC 20:53 UTC: This article was updated to include new information regarding development team recommendations for Kava node operators.

Updated Thursday, March 4, 2021, at UTC 22:05 UTC: Comments from Scott Stuart, co-founder of Kava Labs, and information about HARD protocol were added.