Design Flaw Attack

What Is a Design Flaw Attack?

A design fault attack is when a hostile user intentionally constructs a smart contract, decentralized market, or any other software with knowledge of certain defects to deceive individuals participating in the permissionless ecosystem. 

A design flaw attack usually has strong visible incentives for consumers to lock their funds within a smart contract. A faulty definition in some contract rules or the protocol upon which they are based may result in unfair settlements as well as the release of funds.

A design fault attack can also be carried out when a malicious person seeks to exploit weaknesses in a contract made by some other user without malice. The attack would depend on information asymmetry between the attacker and any possible open network participant in this situation.

Few Examples of a Design Flaw Attack

The Augur platform's prediction markets are one focus of design flaw attacks. Many of its defective markets, for example, rely on vague and ambiguous specifications with the ultimate goal of duping users into betting money on a contract whose outcome will be challenged due to competing parameters and interpretations. 

Additional potential design flaw attacks could target Oracle or data sources like price feeds. An attacker, for example, could purposefully target a market as well as a protocol that depends on a single external price source API that may have been deprecated before a contract expiration/settlement date, providing the attacker an edge in manipulating any smart contracts that rely on this data source.