Tokenomics Security: Protecting Economic Models

Tokenomics security goes beyond code security - it's about ensuring your economic model is resistant to attacks and manipulation.

Common Tokenomics Vulnerabilities

Inflation Attacks

Uncontrolled token minting can devalue holdings:

• Implement maximum supply caps

• Use time-locked minting functions

• Require multi-signature for supply changes

Flash Loan Attacks

Attackers use flash loans to manipulate token prices:

• Implement time-weighted pricing

• Add cooldown periods for critical operations

• Consider circuit breakers

Rug Pull Mechanisms

Prevent project owners from draining liquidity:

• Lock liquidity provider tokens

• Implement vesting schedules for team tokens

• Use multi-signature wallets

• Consider timelocks for withdrawals

Vesting Schedule Security

Implementation Best Practices

contract VestingWallet {
    mapping(address => VestingSchedule) public vestingSchedules;
    
    struct VestingSchedule {
        uint256 totalAmount;
        uint256 released;
        uint256 startTime;
        uint256 duration;
    }
    
    function release() public {
        VestingSchedule storage schedule = vestingSchedules[msg.sender];
        uint256 releasable = vestedAmount(msg.sender) - schedule.released;
        
        require(releasable > 0, "No tokens to release");
        schedule.released += releasable;
        
        token.transfer(msg.sender, releasable);
    }
}

Economic Attack Vectors

Price Manipulation

• Implement minimum liquidity requirements

• Use multiple price oracles

• Consider TWAP mechanisms

Sybil Attacks

• Implement anti-Sybil mechanisms

• Consider reputation systems

• Use proof-of-stake or similar mechanisms

Governance Attacks

• Require minimum stake for proposals

• Implement quorum requirements

• Use time delays for execution

Best Practices

1. **Transparent Economics**: Clearly document all token flows 2. **Limits and Caps**: Implement maximums for critical parameters 3. **Time Delays**: Add delays for major economic changes 4. **Multi-Signature**: Require multiple approvals for sensitive actions 5. **Audit Economics**: Review economic models with experts

Conclusion

Tokenomics security requires careful design and thorough testing. Consider economic attacks alongside technical vulnerabilities in your security review.