DeFi Economic Attack

Definition ∞ A DeFi economic attack exploits a protocol’s financial incentives for illicit gain. This type of exploit targets the underlying financial models and incentive structures of decentralized finance applications, not merely code vulnerabilities. Attackers might manipulate asset prices via oracle feeds, execute flash loan arbitrage to drain liquidity, or exert undue influence through governance mechanisms. The goal is to extract value by disrupting the protocol’s intended economic equilibrium.
Context ∞ DeFi economic attacks are a recurring subject in crypto news, prompting continuous innovation in protocol design and risk management strategies. The industry is actively researching and implementing solutions like decentralized oracle networks and more robust liquidity mechanisms to mitigate these risks. Understanding these attack vectors is vital for assessing the stability of DeFi platforms.