An error in the operational design or business rules implemented within a decentralized finance protocol’s smart contracts. This type of flaw is not necessarily a coding bug but rather a weakness in how the protocol’s functions interact or process specific conditions. A logic flaw can lead to unintended consequences, such as incorrect asset valuations, improper collateral liquidations, or unauthorized fund transfers. It represents a significant risk to the economic stability and security of DeFi applications.
Context
Reports on DeFi hacks frequently highlight logic flaws as the root cause of substantial asset losses, often exceeding simple coding errors. Security audits now focus heavily on economic and logical soundness, alongside code correctness, to prevent these types of vulnerabilities. The ongoing evolution of DeFi protocols requires constant vigilance against subtle logical inconsistencies that could be exploited.
A complex logic flaw leveraging batch swaps and a rounding error allowed attackers to bypass internal access controls, resulting in a $116M liquidity drain.
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