defi-amm-hook-precision-audit

name

defi-amm-hook-precision-audit

description

Audit Uniswap v4 hooks for precision/rounding vulnerabilities and threshold-crossing exploits. Use this skill whenever the user mentions DeFi AMM security, Uniswap v4 hooks, custom accounting, precision drift, rounding abuse, or wants to analyze/audit DEX hook implementations. Also trigger for Bunni V2-style exploits, LDF vulnerabilities, or when reviewing beforeSwap/afterSwap callbacks with custom math.

DeFi AMM Hook Precision Audit

A skill for identifying and analyzing precision/rounding vulnerabilities in Uniswap v4–style DEX hooks, including threshold-crossing exploits and custom accounting drift.

When to use this skill

Use this skill when:

• Auditing Uniswap v4 hook implementations for security vulnerabilities
• Investigating precision/rounding issues in DeFi AMM custom accounting
• Analyzing threshold-crossing exploit patterns (like Bunni V2)
• Reviewing beforeSwap/afterSwap callbacks with custom math
• Testing hook implementations for invariant violations
• Generating test harnesses for hook security validation
• Understanding how fixed-point math errors compound in hooks

Core vulnerability pattern

Hooks that implement custom accounting with fixed-point math can accumulate rounding errors that benefit the swap initiator. The attack pattern:

1. Identify pools with custom hooks performing per-swap math
2. Model the hook's liquidity/redistribution formulas and thresholds
3. Calibrate exact-input swaps to cross boundaries where rounding favors the caller
4. Amplify with flash loans to execute many iterations atomically
5. Withdraw accumulated credits before settlement

Audit methodology

Step 1: Enumerate hook-enabled pools

# Check if pool uses hooks
PoolKey memory key = pm.getPoolKey(currency0, currency1, fee, tickSpacing);
require(key.hooks != address(0), "No hook");

# Inspect enabled callbacks
uint256 callbacks = IHook(key.hooks).hooks();
// Check: beforeSwap, afterSwap, beforeAddLiquidity, etc.

What to look for:

• Non-zero hooks address in PoolKey
• Callbacks enabled for swap operations (beforeSwap/afterSwap)
• Custom rebalancing or redistribution methods

Step 2: Analyze hook math patterns

Run the hook analyzer script to identify risky patterns:

python scripts/analyze_hook_math.py --hook-address <address> --abi <path>

Risky patterns to flag:

• mulDiv (floors) mixed with mulDivUp (ceils)
• Conversions between uint256/int256 with SafeCast
• Q64.96 sqrtPriceX96 conversions without inverse verification
• Per-swap BalanceDelta tracking that credits msg.sender
• Threshold logic on tick boundaries or bucket crossings

Step 3: Model threshold boundaries

Recreate the hook's formula to find where rounding direction changes:

// Example: find tick boundary where rounding flips
function findRoundingBoundary() internal view returns (int24) {
    int24 currentTick = pool.slot0().tick;
    int24 tickSpacing = pool.tickSpacing();
    
    // Test ±1 wei around each boundary
    for (int24 t = currentTick - tickSpacing; t <= currentTick + tickSpacing; t++) {
        if (t % tickSpacing != 0) continue;
        
        uint256 delta = computeDelta(t, t + tickSpacing);
        if (delta % 1000000 != 0) {
            // Rounding residue detected
            emit BoundaryFound(t, delta);
        }
    }
}

Step 4: Generate test harness

Create a Foundry test to verify the vulnerability:

python scripts/generate_test_harness.py \
  --pool-address <address> \
  --hook-address <address> \
  --output test/PrecisionDrift.t.sol

This generates a test template with:

• Pool initialization with the target hook
• Boundary-crossing swap calibration
• Loop to accumulate rounding credits
• Withdrawal path to realize profit

Step 5: Simulate drift scenarios

Run simulations to quantify potential exploit impact:

python scripts/simulate_rounding_drift.py \
  --iterations 1000 \
  --swap-size 1000000000000000000 \
  --output drift_analysis.json

Common vulnerability signatures

Pattern	Risk	Detection
mulDiv without mulDivUp	High	Search for division in delta calculations
Tick alignment mismatch	High	Compare tick rounding in before/after paths
BalanceDelta credits caller	Critical	Trace delta settlement to msg.sender
Q64.96 precision loss	Medium	Check sqrtPrice conversions
Threshold on exact boundaries	High	Look for if (tick == boundary) patterns

Defensive recommendations

For auditors

1. Differential testing: Compare hook math against high-precision reference
2. Boundary fuzzing: Test ±1 wei around all thresholds
3. Invariant checks: Sum of deltas must conserve value modulo fees
4. Rounding policy audit: Ensure all rounding works against the user

For developers

// ✅ Good: round against user
uint256 newBalance = balance - balance.mulDivUp(shares, totalSupply);

// ❌ Bad: round toward user
uint256 newBalance = balance - balance.mulDiv(shares, totalSupply);

// ✅ Good: burn residue
uint256 residue = total - distributed;
if (residue > 0) {
    address(this).transfer(residue); // burn or treasury
}

// ❌ Bad: credit residue to caller
userCredits[msg.sender] += residue;

Case study: Bunni V2 pattern

The Bunni V2 exploit (Sep 2025) demonstrated this vulnerability:

1. Price push: Flash loan 3M USDT, push tick to ~5000, shrink active USDC to ~28 wei
2. Rounding drain: 44 micro-withdrawals exploited floor rounding, reduced balance to 4 wei (-85.7%)
3. Liquidity rebound: Large swap moved tick to ~839,189, liquidity estimate increased 16.8%
4. Exit: Sandwich attack at inflated price, profit realized

Root cause: mulDiv (floor) in idle balance update allowed cumulative underestimation.

Fix: Use mulDivUp to round up, preventing downward ratcheting.

Quick audit checklist

• Pool uses non-zero hooks address?
• beforeSwap/afterSwap callbacks enabled?
• Custom math in per-swap accounting?
• Consistent rounding across all paths?
• BalanceDelta settlement neutral (no caller credit)?
• Threshold logic tested at ±1 wei boundaries?
• Q64.96 conversions verified bidirectionally?
• Rounding residue burned or sent to treasury?

References

• Bunni V2 Exploit Post-Mortem
• Uniswap v4 Core Whitepaper
• QuillAudits: Uniswap v4 Hooks Security
• Uniswap v4 Liquidity Mechanics

Scripts

• scripts/analyze_hook_math.py - Analyze hook bytecode/ABI for risky patterns
• scripts/generate_test_harness.py - Generate Foundry test templates
• scripts/simulate_rounding_drift.py - Simulate precision drift scenarios

Run python scripts/<script>.py --help for usage details.