What is the most important issue with AMM-based DEX?
Liquidity! Everyone knows.
But do you know what happens if there isn’t enough liquidity in the pool?
Swap prices can be easily manipulated and DEX can be destroyed.
Yes, you’ve probably heard it a lot.
But, but, have you ever destroyed a DEX for real?
Basically, DEX reports a price based on liquidity, and a user can use this to flip back and forth and eventually drain the DEX in theory.
All right. I will provide a DEX. Play with it.
https://github.com/maAPPsDEV/dex-attack
The goal of the game is for you to hack the basic DEX contract and steal the funds by price manipulation.
Note how many swaps are needed in order to destroy a DEX that has 10 times more liquidity than you got.
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