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Token Exploit

Definition

A token exploit is a security breach or attack targeting vulnerabilities in a cryptocurrency token’s smart contract or its underlying protocol. This malicious act takes advantage of flaws in the token’s code, logic, or associated decentralized applications to illegally gain control of assets, manipulate token supply, or drain liquidity. Exploits can range from reentrancy attacks and flash loan manipulations to governance attacks, resulting in significant financial losses for users and protocol operators. Such incidents undermine confidence in the security of digital assets.