Definition ∞ A DeFi rounding error is a subtle calculation inaccuracy in decentralized finance protocols that can be exploited. These errors typically occur when small fractional amounts are repeatedly rounded during complex financial computations within smart contracts. While individually insignificant, these minute discrepancies can accumulate over many transactions or be strategically exploited by an attacker. Such an exploit can siphon off small quantities of assets which, when aggregated, result in substantial illicit gains.
Context ∞ News often highlights DeFi rounding errors when they lead to unexpected losses or are exploited by malicious actors, underscoring the extreme precision required in smart contract arithmetic. The ongoing discussion among developers focuses on rigorous testing and formal verification to eliminate such subtle vulnerabilities. Protocols are continually refined to ensure exact precision in all financial calculations, preventing any exploitable fractional discrepancies.
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