Oracles play a critical role in many DeFi applications where they are used to correctly report asset prices and other data. As evident by many incidents such as Cheese Bank and Warp Finance, any oracle price manipulations can lead to multi-million losses. The next Damn Vulnerable DeFi challenge offers a plausible scenario where a price Oracle platform appears to leak potentially sensitive data:

While poking around a web service of one of the most popular DeFi projects in the space, you get a somewhat strange response from their server. This is a snippet:HTTP/2 200 OK content-type: text/html content-language: en…

Last month, ETHworks put together a really fun smart contract contest where players competed to solve all the clues and unlock a 7 ETH reward. While I did not win, I had an absolute blast participating in it and wanted to share my notes in case you want to learn about password cracking and smart contract hacking techniques. If that sounds interesting to you, let’s dive right in.

#0xPOLAND

On November 17th, 2020, while preparing for the next edition of the Blockchain Threat Intelligence newsletter, I ran across an interesting tweet advertising some kind of a smart contract contest:

The address…

The next challenge in the series teaches us about dangers of mixing flash loans and governance systems:

A new cool lending pool has launched! It's now offering flash loans of DVT tokens.Wow, and it even includes a really fancy governance mechanism to control it.What could go wrong, right ?You start with no DVT tokens in balance, and the pool has 1.5 million. Your objective: steal them all.

The governance contract described in the challenge implements two functions to queue and execute action proposals. Action queue mechanism verifies that an actor has sufficient votes as follows:

Notice…

Let’s continue our journey of learning about vulnerable DeFi applications. The next exercise, the-rewarder, challenges us to cheat at getting all of the rewards in a stripped down liquidity pool app:

There's a pool offering rewards in tokens every 5 days for those who deposit their DVT tokens into it.Alice, Bob, Charlie and David have already deposited some DVT tokens, and have won their rewards!You don't have any DVT tokens. Luckily, these are really popular nowadays, so there's another pool offering them in free flash loans.In the upcoming round, you must claim all rewards for yourself.

The…

The next puzzle in the series continues challenging players to empty DeFi lending pool through any means necessary. Here is the challenge:

A surprisingly simple lending pool allows anyone to deposit ETH, and withdraw it at any point in time.This very simple lending pool has 1000 ETH in balance already, and is offering free flash loans using the deposited ETH to promote their system.You must steal all ETH from the lending pool.

The challenge.js file performs basic setup on the vulnerable pool contract and deposits some initial balance:

Let’s take a look at the SideEntranceLenderPool contract to…

Let’s dive into the next challenge called Truster in the OpenZeppelin’s fun wargame:

More and more lending pools are offering flash loans. In this case, a new pool has launched that is offering flash loans of DVT tokens for free.Currently the pool has 1 million DVT tokens in balance. And you have nothing.But don't worry, you might be able to steal them all from the pool.

The challenge sets up a lending pool instance of TrusterLenderPool and deposits 1M ETH:

The TrusterLenderPool has a single function called flashLoan which can lend any requested amount to the borrower…

Continuing our exploration of the Damn Vulnerable DeFi wargame, the next puzzle is called Naive receiver. It challenges players to drain a DeFi user’s account:

There's a lending pool offering quite expensive flash loans of Ether, which has 1000 ETH in balance.You also see that a user has deployed a contract with 10 ETH in balance, capable of interacting with the lending pool and receiveing flash loans of ETH.Drain all ETH funds from the user's contract. Doing it in a single transaction is a big plus ;)

The challenge file sets up a lending pool and a user…

Damn Vulnerable DeFi is an Ethereum smart contract wargame developed by @tinchoabbate from OpenZeppelin. The competition includes 8 unique challenges educating players about various DeFi vulnerabilities.

In this article, I will share basic set up steps to get you started on the challenges and go over the first challenge.

Wargame Setup

To begin playing the wargame, you have to set up your local environment first. Start by cloning the challenges repository from Github and installing Node dependencies:

% git clone https://github.com/OpenZeppelin/damn-vulnerable-defi.git
% cd damn-vulnerable-defi
% npm install

Once you install all of the dependencies you can test the environment by listing available…