Definition ∞ A DeFi economic exploit refers to a malicious act that manipulates the economic logic or market conditions of a decentralized finance protocol to extract unfair value. These exploits often leverage flash loans, oracle manipulation, or arbitrage opportunities to drain liquidity pools or alter asset prices temporarily. Unlike smart contract bugs, these attacks exploit the economic incentives and assumptions within the protocol’s design. Such incidents cause substantial financial losses and erode user confidence in the affected platforms.
Context ∞ News articles frequently report on DeFi economic exploits, detailing the methods used and the financial impact on users and protocols. These events highlight the ongoing security challenges in decentralized finance, prompting discussions about robust risk management and protocol design. The industry continually seeks to fortify economic security models and conduct thorough audits to prevent future attacks.
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