Definition ∞ A supply inflation attack involves an unauthorized increase in the total circulating quantity of a digital asset, typically through a vulnerability in its smart contract or protocol design. This malicious act dilutes the value of existing tokens held by legitimate participants. Such an attack directly manipulates the asset’s economic model, leading to a sudden and significant depreciation. It represents a severe threat to token holders.
Context ∞ Supply inflation attacks are a serious threat to the economic stability of digital asset protocols, with several historical incidents demonstrating their destructive potential. Discussions often center on rigorous smart contract auditing and formal verification to identify and eliminate such vulnerabilities before deployment. A critical future development involves continuous security monitoring and rapid response mechanisms to mitigate the impact of any detected inflation attempts.
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