Definition ∞ LP token drain describes the unauthorized removal of liquidity provider tokens from a decentralized finance protocol. This is a malicious act where an attacker exploits a vulnerability in a decentralized exchange or lending protocol. It results in the withdrawal of liquidity provider (LP) tokens that represent a share of assets in a liquidity pool. Such an event typically results in significant financial losses for legitimate liquidity providers.
Context ∞ LP token drains are a recurring theme in cryptocurrency security incidents, often stemming from smart contract flaws or compromised private keys. News reports on these events highlight the constant need for robust security audits and vigilant monitoring within the decentralized finance sector. Safeguarding user assets remains a top priority.
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