DeFi Smart Contract Vulnerabilities Audit Guide

Here are three of the most common and critical DeFi smart contract vulnerabilities, along with specific detection methods for each.

1. Reentrancy Vulnerability

What it is:
Reentrancy occurs when a smart contract makes an external call to another contract (or itself) before completing its state changes. An attacker can exploit this by re-entering the function via the external call before the state is updated, allowing them to drain funds or manipulate balances.

Specific Example:
A token contract has a withdraw() function that:

1. Checks the user’s balance.
2. Sends ETH to the user via address.transfer().
3. Decrements the user’s balance.

An attacker can create a malicious contract that, upon receiving ETH, immediately calls withdraw() again. Since the balance hasn’t been decremented yet, the check passes, and the attacker drains the entire pool.

How to Detect:

• **Static Analysis Tools