DeFi AMM Security

DeFi AMM Security

Critical vulnerability patterns and hardened implementations for Solidity AMM contracts, LP vaults, and swap functions.

When to Use

• Writing or auditing a Solidity AMM or liquidity-pool contract
• Implementing swap, deposit, withdraw, mint, or burn flows that hold token balances
• Reviewing any contract that uses token.balanceOf(address(this)) in share or reserve math
• Adding fee setters, pausers, oracle updates, or other admin functions to a DeFi protocol

How It Works

Use this as a checklist-plus-pattern library. Review every user entrypoint against the categories below and prefer the hardened examples over hand-rolled variants.

Execution Safety

The shell commands in this skill are local audit examples. Run them only in a trusted checkout or disposable sandbox, and do not splice untrusted contract names, paths, RPC URLs, private keys, or user-supplied flags into shell commands. Ask before installing tools or running long fuzzing/​static-analysis jobs that may consume significant local or paid resources.

Never include secrets, private keys, seed phrases, API tokens, or mainnet signing credentials in command examples, logs, or reports.

Examples

Reentrancy: enforce CEI order

Vulnerable:

function withdraw(uint256 amount) external {
    require(balances[msg.sender] >= amount);
    token.transfer(msg.sender, amount);
    balances[msg.sender] -= amount;
}

Safe:

import {ReentrancyGuard} from "@openzeppelin/​contracts/​utils/​ReentrancyGuard.sol";
import {SafeERC20} from "@openzeppelin/​contracts/​token/​ERC20/​utils/​SafeERC20.sol";

using SafeERC20 for IERC20;

function withdraw(uint256 amount) external nonReentrant {
    require(balances[msg.sender] >= amount, "Insufficient");
    balances[msg.sender] -= amount;
    token.safeTransfer(msg.sender, amount);
}

Do not write your own guard when a hardened library exists.

Donation or inflation attacks

Using token.balanceOf(address(this)) directly for share math lets attackers manipulate the denominator by sending tokens to the contract outside the intended path.

// Vulnerable
function deposit(uint256 assets) external returns (uint256 shares) {
    shares = (assets * totalShares) / token.balanceOf(address(this));
}

// Safe
uint256 private _totalAssets;

function deposit(uint256 assets) external nonReentrant returns (uint256 shares) {
    uint256 balBefore = token.balanceOf(address(this));
    token.safeTransferFrom(msg.sender, address(this), assets);
    uint256 received = token.balanceOf(address(this)) - balBefore;

    shares = totalShares == 0 ? received : (received * totalShares) / _totalAssets;
    _totalAssets += received;
    totalShares += shares;
}

Track internal accounting and measure actual tokens received.

Oracle manipulation

Spot prices are flash-loan manipulable. Prefer TWAP.

uint32[] memory secondsAgos = new uint32[](2);
secondsAgos[0] = 1800;
secondsAgos[1] = 0;
(int56[] memory tickCumulatives,) = IUniswapV3Pool(pool).observe(secondsAgos);
int24 twapTick = int24(
    (tickCumulatives[1] - tickCumulatives[0]) / int56(uint56(30 minutes))
);
uint160 sqrtPriceX96 = TickMath.getSqrtRatioAtTick(twapTick);

Slippage protection

Every swap path needs caller-provided slippage and a deadline.

function swap(
    uint256 amountIn,
    uint256 amountOutMin,
    uint256 deadline
) external returns (uint256 amountOut) {
    require(block.timestamp <= deadline, "Expired");
    amountOut = _calculateOut(amountIn);
    require(amountOut >= amountOutMin, "Slippage exceeded");
    _executeSwap(amountIn, amountOut);
}

Safe reserve math

import {FullMath} from "@uniswap/​v3-core/​contracts/​libraries/​FullMath.sol";

uint256 result = FullMath.mulDiv(a, b, c);

For large reserve math, avoid naive a * b / c when overflow risk exists.

Admin controls

import {Ownable2Step} from "@openzeppelin/​contracts/​access/​Ownable2Step.sol";

contract MyAMM is Ownable2Step {
    function setFee(uint256 fee) external onlyOwner { ... }
    function pause() external onlyOwner { ... }
}

Prefer explicit acceptance for ownership transfer and gate every privileged path.

Security Checklist

• Reentrancy-exposed entrypoints use nonReentrant
• CEI ordering is respected
• Share math does not depend on raw balanceOf(address(this))
• ERC-20 transfers use SafeERC20
• Deposits measure actual tokens received
• Oracle reads use TWAP or another manipulation-resistant source
• Swaps require amountOutMin and deadline
• Overflow-sensitive reserve math uses safe primitives like mulDiv
• Admin functions are access-controlled
• Emergency pause exists and is tested
• Static analysis and fuzzing are run before production

Audit Tools

pip install slither-analyzer
slither . --exclude-dependencies

echidna-test . --contract YourAMM --config echidna.yaml

forge test --fuzz-runs 10000