Crypto scams · 8 cases
DeFi and contracts
In decentralized finance, smart contracts handle money with no middleman, and a flaw in their logic becomes an open door. Flash loans, skewed oracles, sandwich attacks, stablecoins losing their peg: these cases rebuild the attack transaction by transaction.
When an atomic swap goes wrong
- What happened
- An atomic swap is only safe if its lock deadlines are set right. Badly chosen, one side can claim everything.
- The reflex
- Read a contract's terms before locking funds in it, deadlines included.
The case
The Atomic Swap
A swap that cannot cheat. Yet someone took both sides.
The leaked sealed bid
- What happened
- A bid meant to stay hidden leaked before the reveal: the winner outbid it by a single token.
- The reflex
- A sealed bid must stay sealed to the end: don't hand it to any middleman.
The case
The Sealed Auction
Sealed bids, and a winner who outbids by a single token. As if he knew.
A gas war during a mint
- What happened
- During a mint, everyone outbid each other on fees to go first. In the rush, someone was diverting the refunds.
- The reflex
- In the rush of a launch, set yourself a fee limit and stick to it.
The case
The Gas War
A mint under siege, fees exploding, and someone siphoning the refunds.
How a stablecoin collapses
- What happened
- A stablecoin with no real reserve lost its peg: every redemption minted more tokens and sped up the fall.
- The reflex
- A stablecoin is only worth what backs it: ask what is behind it.
The case
The Death Spiral
A stablecoin breaks its peg overnight, and every redemption deepens the fall.
Oracle manipulation by flash loan
- What happened
- A flash loan skewed the price an oracle read, and the protocol wrongly liquidated its borrowers.
- The reflex
- Keep a margin on your loans: a rigged price can liquidate you in a single block.
The case
The Corrupted Oracle
A price rigged for a single block, and the liquidations fall like dominoes.
The domino fall of a wrapped asset
- What happened
- An asset wrapped, bridged, deposited, then lent with leverage: when one layer gave way, they all fell.
- The reflex
- The more protocols a yield stacks, the more ways it can break: count the layers.
The case
The Nested Token
Six layers of stacked promises. When one gave way, they all collapsed.
The sandwich attack
- What happened
- A bot placed its orders right before and right after the victim's, to take the price gap.
- The reflex
- Set a low slippage tolerance on your swaps: it limits what a sandwich can take from you.
The case
The Cross-Chain Sandwich
A transaction caught in a sandwich, relay after relay, from one chain to the next.
The flash loan attack
- What happened
- In a single transaction, a giant loan skewed a price, drained a pool and was repaid before the block ended.
- The reflex
- Before depositing into a protocol, check that it was audited and where it gets its prices.
The case
The Fatal Flash Loan
Borrow, rig, drain, repay: a whole protocol falls in one transaction.