security-risk

In a lending protocol, a situation where a borrowed position's collateral realized value has fallen below the borrowed amount itself, creating a gap where the protocol's overall assets are insufficient to repay all depositors' principal — usually occurring when the liquidation mechanism fails to react in time to sharp market volatility.

A protocol enabling asset transfers or message passing between different blockchains. Typically operates by locking assets on the source chain and minting corresponding wrapped tokens on the destination chain. Core infrastructure for cross-chain DeFi operations, and historically one of the highest-value attack targets in the industry.

A sudden, extreme price drop occurring within an extremely short window (usually seconds to minutes) far exceeding normal volatility range, often followed by a sharp rebound within a similarly short window — this kind of severe, brief price distortion is frequently triggered by market structural factors rather than fundamental changes.

A collateral-free loan that must be borrowed, used, and fully repaid within a single blockchain transaction; if repayment is not completed before the transaction closes, the entire transaction is rolled back, leaving the lender with zero credit risk.

An internal capital buffer pool a protocol builds by setting aside a portion of its own operating revenue (usually fees), used to prioritize covering a shortfall when the liquidation mechanism fails to react in time under extreme conditions and bad debt occurs — lowering the chance losses get passed directly onto everyday depositors.

One liquidation's sell pressure pushes price down, causing more positions to hit their liquidation threshold and generate further sell pressure — this self-reinforcing loop drives price down far beyond what fundamentals would explain within a short window, until the sell pressure at some point finally gets fully absorbed by the market.

An attack technique where an attacker artificially (usually through a massive trade) instantly distorts the price data source a protocol relies on, causing a smart contract to execute liquidation, lending, or swap operations based on an incorrect price, profiting improperly as a result.

A deliberate scam where a project team or developer premeditatedly absconds with user funds, typically occurring after a project has attracted a certain amount of capital, using tactics like draining liquidity, malicious minting, or code backdoors to instantly wipe out investors' assets.

An attacker exploits a design flaw in a vault's internal accounting logic for calculating 'how much underlying asset each share corresponds to,' manipulating the ratio between total assets and total shares to make the vault miscalculate a share's true value — thereby stealing other depositors' assets at extremely low cost, or obtaining excess borrowing capacity in another protocol.

An attacker exploiting a logic error or security vulnerability that exists in a <a href="https://crypto-bible.com/en/glossary/blockchain-fundamentals/smart-contract/" target="_blank" rel="noopener">Smart Contract</a>'s code to execute an operation the designers never intended, causing harm to the protocol or its users — unlike a deliberate team scam, this type of vulnerability typically originates from a genuine technical flaw in the code itself.