Security Analysis of DeFi: Vulnerabilities, Attacks and Advances

TL;DR

This paper provides a comprehensive analysis of DeFi vulnerabilities, attacks, and recent optimization efforts, highlighting security challenges and future research directions in the Ethereum-based DeFi ecosystem.

Contribution

It systematically analyzes DeFi vulnerabilities across multiple levels, investigates real-world attacks, and summarizes optimization achievements and future directions.

Findings

Identification of key vulnerabilities in DeFi systems

Analysis of real-world attack cases

Summary of recent optimization strategies

Abstract

Decentralized finance (DeFi) in Ethereum is a financial ecosystem built on the blockchain that has locked over 200 billion USD until April 2022. All transaction information is transparent and open when transacting through the DeFi protocol, which has led to a series of attacks. Several studies have attempted to optimize it from both economic and technical perspectives. However, few works analyze the vulnerabilities and optimizations of the entire DeFi system. In this paper, we first systematically analyze vulnerabilities related to DeFi in Ethereum at several levels, then we investigate real-world attacks. Finally, we summarize the achievements of DeFi optimization and provide some future directions.