Vault inflation attack

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A vault inflation attack is a malicious tactic that exploits a smart contract’s vulnerability, causing an excessive increase in the token supply. In this article we will review an example of a vault inflation attack and how to protect against this type of attack.

Vault inflation attack example

Imagine a smart contract with a fixed supply of tokens. A hacker injects false data, inflating the supply, and steals tokens from users. Below is an example of Solidity code that contains the vulnerability.

pragma solidity ^0.8.0;

contract Token {
uint256 private constant MAX_TOTAL_SUPPLY = 1000000; // Fixed maximum total supply
uint256 private totalSupply;
mapping(address => uint256) private balances;

function _mint(address to, uint amount) public {
    require(totalSupply > 0);
    require(amount > 0);
    require(amount <= _maxTotalSupply);

    // Here lies the vulnerability: no check for _maxTotalSupply
    _totalSupply += amount;
    balances[to] += amount;
}

Try it in Remix

To prevent a vault inflation attack

  1. Implement proper input validation and checks.
  2. Use secure and audited smart contract code.
  3. Regularly update and audit your smart contract.
  4. Limit the number of decimals and token supply.
  5. Utilize multi-signature wallets and governance mechanisms.

Below is an example of Solidity code that contains code to protect against the vulnerability.

pragma solidity ^0.8.0;

contract Token {
uint256 private constant MAX_TOTAL_SUPPLY = 1000000; // Fixed maximum total supply
uint256 private totalSupply;
mapping(address => uint256) private balances;

function _mint(address to, uint256 amount) internal {
    require(totalSupply > 0);
    require(amount > 0);
    require(amount <= MAX_TOTAL_SUPPLY); // Added check for MAX_TOTAL_SUPPLY

    // Ensure the total supply doesn't exceed the maximum
    if (totalSupply + amount > MAX_TOTAL_SUPPLY) {
        amount = MAX_TOTAL_SUPPLY - totalSupply;
    }

Try it in Remix

In this updated code, we’ve added a constant MAX_TOTAL_SUPPLY to define the maximum total supply of tokens. We’ve also added a check in the _mint function to ensure that the total supply doesn’t exceed this maximum. If the new supply would exceed the maximum, the function adjusts the amount to be minted accordingly. This prevents the inflation attack by capping the total supply of token.

Resources

Blockchain Networks

Below is a list of EVM compatible Mainnet and Testnet blockchain networks. Each link contains network configuration, links to multiple faucets for test ETH and tokens, bridge details, and technical resources for each blockchain. Basically everything you need to test and deploy smart contracts or decentralized applications on each chain. For a list of popular Ethereum forums and chat applications click here.

Ethereum test network configuration and test ETH faucet information
Optimistic Ethereum Mainnet and Testnet configuration, bridge details, etc.
Polygon network Mainnet and Testnet configuration, faucets for test MATIC tokens, bridge details, etc.
Binance Smart Chain Mainnet and Testnet configuration, faucets for test BNB tokens, bridge details, etc.
Fanton networt Mainnet and Testnet configuration, faucets for test FTM tokens, bridge details, etc.
Kucoin Chain Mainnet and Testnet configuration, faucets for test KCS tokens, bridge details, etc.

Web3 Software Libraries

You can use the following libraries to interact with an EVM compatible blockchain.