Top 5 Smart Contract Vulnerabilities in 2025

Introduction

As DeFi continues to evolve in 2025, smart contract vulnerabilities remain a critical concern for developers and investors alike. This year has seen several high-profile exploits that have resulted in millions of dollars in losses. Understanding these vulnerabilities is essential for anyone involved in the Web3 ecosystem.

1. Reentrancy Attacks

Despite being one of the oldest vulnerabilities in Ethereum smart contracts, reentrancy attacks continue to plague DeFi protocols. In 2025, we've seen sophisticated variations of this attack vector that bypass traditional reentrancy guards.

The fundamental issue occurs when a contract sends funds before updating its internal state, allowing an attacker to recursively call back into the vulnerable function and drain funds.

Recent examples include the March 2025 exploit of a lending protocol that lost over $18 million due to a complex cross-contract reentrancy vulnerability.

2. Oracle Manipulation

Price oracle manipulation has become increasingly sophisticated in 2025. Attackers are now targeting protocols that rely on time-weighted average prices (TWAPs) by manipulating liquidity across multiple blocks.

Flash loan attacks combined with oracle manipulation continue to be a significant threat, especially for newer DeFi protocols with lower liquidity.

3. Access Control Vulnerabilities

Improper access control remains a common vulnerability in 2025. We've observed several incidents where privileged functions lacked proper authorization checks or relied on flawed validation mechanisms.

In April 2025, a prominent NFT marketplace suffered a breach when attackers discovered an administrative function that failed to properly validate caller permissions, resulting in unauthorized listing removals and price manipulations.

4. Logic Errors in Complex Systems

As DeFi protocols become more complex, integrating multiple protocols and layers, logic errors have become more prevalent and harder to detect.

Composability between protocols, while powerful, introduces new attack surfaces where unexpected interactions between otherwise secure contracts can create vulnerabilities.

5. Upgrade Mechanism Flaws

With many protocols implementing upgradeable contracts, vulnerabilities in upgrade mechanisms have become a significant concern. In several cases this year, flawed implementation of proxy patterns has led to security incidents.

In one notable case from February 2025, a protocol's upgrade mechanism allowed an attacker to point the implementation contract to a malicious version, effectively taking control of user funds.

Conclusion

As smart contract development continues to evolve, so do the attack vectors targeting them. Comprehensive security audits, formal verification, and thorough testing remain essential practices for any Web3 project.

At Sentinel, our smart contract auditing services specifically focus on identifying these vulnerabilities before they can be exploited, helping to secure the future of DeFi and the broader Web3 ecosystem.