Saddle Finance Hack

TOTAL LOST $276K
Low Other

Summarize with AI

ChatGPT Perplexity Claude Grok
Affected Chain 2021 Incident surface
Recovered - No recovery reported
All-Time Rank #1177 By amount stolen
Auditors 3 Prior security audits

Incident Overview

After the Saddle Finance official launch, some pools were arbitraged for millions within hours of launch.

Example of transactions:

https://etherscan.io/tx/0x299ff1ac…33de46

https://etherscan.io/tx/0x3c351cea…63138a

Saddle Finance response:

"Some of the early transactions were executed with high slippage. From our initial investigation the smart contracts are functioning as expected, but individuals may not have yielded to warnings of high slippage when using the deposit form and subsequently reviewing their deposits."

Incident Report

Protocol / Project Saddle Finance
Date of Incident
Attack Technique Other
Classification Exchange (DEX)
Primary Source View Post-Mortem #1 View Post-Mortem #2 View Post-Mortem #3

Protocol Information

Protocol Type Dexs
Affected Token SDL
Official Website saddle.finance/
Protocol Twitter/X @saddlefinance
Team Anonymous
Source Code Unverified

Market Context at Time of Hack

Token Categories
DeFi DAO Ethereum Ecosystem Framework Ventures Portfolio Real World Assets Protocols Circle Ventures Portfolio Base Ecosystem Binance Ecosystem
Protocol Links
GitHub

What the Attacker Needed to Succeed

Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.

Technical Knowledge Deep understanding of other and Solidity and EVM internals
Capital Required Seed capital to cover gas and initial position setup
On-Chain Access Ability to interact with smart contracts and deploy a custom exploit contract
Protocol Analysis Identification of the exploitable vulnerability in Saddle Finance's contract logic - root cause: exchange (dex)
Execution Speed Precise transaction ordering and timing to exploit the vulnerability within a single atomic block
Obfuscation Plan A strategy to launder and move stolen funds - typically through mixers, cross-chain bridges, or decentralized DEX swaps to resist tracing

What Auditors Should Check

Could this have been caught in audit? Likely — with a thorough Other audit checklist and test coverage
Audited by Audit Report 1, Audit Report 2, Audit Report 3 — still lost $276K. Prior audits don't guarantee safety, especially after post-audit code changes.

If you're auditing a protocol with similar architecture to Saddle Finance, these are the critical security checks that could have prevented this incident (January 2021).

  • Verify all logic paths related to Other are guarded by proper access controls and input validation
  • Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs

Master these auditing techniques with hands-on labs and real exploit scenarios in the Smart Contract Hacking course.

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Security Audit History

Sources & References

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