DeFi Smart Contract Vulnerabilities Audit Guide

Here are three of the most common and critical DeFi smart contract vulnerabilities, along with specific methods to detect them.

1. Reentrancy

What it is:
Reentrancy occurs when a contract calls an external contract (or function) before it has finished updating its own state. An attacker can exploit this by recursively calling the vulnerable function before the state has been updated, allowing them to drain funds multiple times. This was famously exploited in the 2016 DAO hack.

How to Detect It:

• Static Analysis Tools: Use tools like Slither or Mythril to automatically flag functions that perform external calls before state changes.
• Manual Code Review – State Update Order: Check for functions that follow the pattern:
  1. External call (e.g., transfer(), call())
  2. State update (e.g., balanceOf[msg.sender] -= amount)