Protocol failure
A flaw in the logic, in the permissions or in the integration of contracts can allow an operation that harms the assets exposed to the protocol. Confirming the transaction on the network does not mean that the contract's behavior was the one intended.
O alcance de cada cobertura depende das condições expressas no contrato.
How it happens
- An operation reaches a condition that the contract does not handle adequately, such as a manipulable reference price or an overly broad permission.
- The contract executes the available logic. A missing or incorrect check can allow assets to be moved under improper conditions.
- The network checks its own rules and may confirm that execution. That confirmation does not validate the economic intent of the operation, nor does it automatically recover the assets.
- The effect appears in the positions exposed to the contract and may be noticed only after the movement.
An example, with no proper name
In a hypothetical example, a lending protocol uses the price from a market with little liquidity to value collateral. An operation changes that price temporarily, makes the collateral look larger and allows a loan above what the collateral would support. The problem lies in the reference the contract accepts.
The example describes the mechanism, not a real incident. Concrete cases in this segment belong to the people who lived them, and presenting them here would suggest an involvement that did not happen.
What the impact is
The position may suffer a partial or a total loss. To understand the scope, identify the contracts involved, the active permissions and the assets actually exposed to the flaw.
What reduces the exposure
- Examine the contract's history and the scope of the published audits. A report refers to the scope and the version that were assessed, and it does not guarantee the absence of flaws.
- Identify common dependencies among protocols; positions with different names may use the same contract, provider or mechanism.
- Check which spending approvals remain active, their limits and how to revoke them. Stopping use of a protocol does not necessarily cancel a permission.
What a claim in this family needs to prove
- The hash of the transaction that caused the loss.
- The protected address declared at purchase, which must be the same one that suffered the loss.
- The address of the contract involved and the network on which it operates.
The exact requirement is the one in the published version of the purchased coverage contract. This list is what is usually necessary in this family.
Coverages in this family
What the operator has already published for Protocol failure.
No coverage in this family has been published yet. The risk is still recognized by the product. What does not exist yet is the corresponding offer.
FINOVEX Capital Protection
If it happens, this is the process.
See the steps for submission, review and decision. Decisions to approve, deny or pay require a second authorized person, and the process is recorded.
Consulting this site does not create coverage. Protection applies to the covered events and to the conditions of the collective policy.