A design flaw attack is a type of smart contract attack in which the creator of the smart contract intentionally creates a flaw in their design to enable them to maliciously take advantage of unknowing users in the future.

Design flaw attacks can be used for anything from rug pools (in which certain code allows the creator to empty other users’ liquidity into their own wallet), to intentionally unfair or unclear definitions that put users at a disadvantage.

What is an example of a design flaw attack?

Some of the most famous examples of design flaw attacks have occurred on the decentralized prediction market Augur. Since Augur relies on outside events (such as election results or sporting match results), an ‘oracle’ is necessary to communicate between the blockchain and the real world. This can make oracles reliant on conditions that are subject to interpretation and unpredictable circumstances.

Do design flaw attacks happen often?

In the smart contract world, design flaw attacks can be quite common, particularly in areas where it is difficult to determine with certainty that a necessary condition has taken place. It is best to always do your own research and if you cannot read the code yourself, make sure the platform and smart contract have been verified by others.