Smart Contract Vulnerabilities Unveiled: DeFi Slippage Attack

Decentralized Finance (DeFi) platforms allow users to trade assets in a decentralized manner, but this process is susceptible to a specific vulnerability known as a slippage attack. Slippage occurs when the price of an asset changes between the time a trade is initiated and when it is executed. In this article, we’ll explore how slippage attacks work, provide examples of vulnerable code, and explain how to mitigate these risks.

DeFi Slippage Attack

What is a Slippage Attack?

A slippage attack occurs when an attacker takes advantage of price changes during a trade on a decentralized exchange (DEX). In DeFi, slippage refers to the difference between the expected price of a trade and the price at which the trade is actually executed. Attackers can manipulate these price changes by influencing the market between the initiation and execution of the trade, causing the user to pay more than intended.

Vulnerable Code Example

Consider the following example of a vulnerable smart contract written in Solidity, which allows users to trade tokens without slippage protection:

pragma solidity ^0.8.0;

contract SlippageVulnerable {
    IERC20 public token;
    uint256 public price;  // Price in wei per token

    constructor(IERC20 _token…