Improper/Missing Deadline Check in Smart Contracts – A Comprehensive Security Analysis

Implementing deadline checks in smart contracts is a critical security measure in the decentralized world. An improper or missing deadline check can result in transactions being executed outside the intended timeframe, leading to significant financial losses and security risks. In this blog post, we delve deep into the risks associated with faulty deadline validations and outline the benefits of proper implementation – supported by detailed examples, technical analysis, and audits conducted by Bailsec.

Smart contracts are frequently used for time-sensitive operations such as token swaps, liquidity provisioning, and flash loans. A deadline parameter is typically used to ensure that a transaction is executed within a specified window. If this check is missing or implemented incorrectly, several issues may arise:

Consider the following scenario:

Initial Situation:
Bob intends to swap 500 XYZ for 5 ETH and subsequently sell 5 ETH for 10,000 USDC. This is a common operation where quick and accurate execution is essential.
Transaction Gets Stuck:
To reduce costs, Bob sets a low gas fee. Miners then prioritize other, more profitable transactions, causing his swap to remain stuck in the mempool for hours or even days.

Market Conditions Change:
During the delay, the price of ETH drops considerably. Instead of receiving the expected 10,000 USDC, Bob ends up receiving only 6,500 USDC for his 5 ETH.

Sandwich Attack:
Additionally, an MEV bot executes a sandwich attack by placing transactions immediately before and after Bob’s swap, further manipulating the price.

Without a defined deadline, attackers can monitor the mempool and strategically insert transactions:

• Sandwich Attacks:

By placing transactions immediately before and after the user's swap, the attacker artificially alters the price in their favor.

• Impact:

The user is forced to execute the trade at a disadvantageous rate, leading to significant financial losses.

• Use of block.timestamp:

Many smart contracts use block.timestamp as a deadline to ensure transactions are executed within a specific period

• Potential Pitfalls:

In high-precision applications, even slight timing deviations can lead to suboptimal outcomes.

• Incorrect Implementation:

An incorrect condition (e.g., using if (deadline <= block.timestamp) instead of the proper comparison) might inadvertently reject valid transactions while accepting expired ones.

Financial Losses:
As demonstrated in Bob’s example, delayed transactions can lead to substantial financial losses – losing 3,500 USDC in a single transaction can quickly add up if many users are affected.
Increased Vulnerability to MEV:
Missing deadlines allow MEV bots to manipulate transaction order and profit from the delay at the expense of users.
Loss of User Trust:
Repeated security flaws and unpredictable transaction execution can erode user trust in the decentralized platform over time.

Minimized Losses:
Enforcing a proper deadline check ensures transactions are executed within the desired timeframe, thereby reducing the risk of financial losses due to market fluctuations.
Enhanced Security:
A correctly implemented deadline ensures transactions occur within a controlled window, making it significantly harder for attackers to perform sandwich attacks or other manipulative tactics.
Strengthened User Confidence:
Transparent and secure transaction processes build user trust – especially when audits, such as those conducted by Bailsec, are in place.
Learn more about our audit findings on our Audits page
Competitive Advantage:
Projects that rigorously secure their smart contracts and conduct regular audits stand out from competitors, attracting more investors and users.

• Strict Deadline Validation:

Implement precise deadline checks using block.timestamp (or enhanced time-measurement mechanisms) to ensure transactions do not linger in the mempool beyond the intended period.

• Accurate Parameter Settings:

Avoid reversed logic in time comparisons to ensure that only transactions within the predetermined deadline are accepted.

• Regular Audits by Bailsec:

Continuously perform code reviews and external audits to verify that deadline checks and other security measures are correctly implemented.

• Monitoring and Alert Systems:

Utilize advanced monitoring tools to track unusual transaction patterns and promptly detect potential manipulation attempts.

• Fostering a Security Culture:

Encourage a deep understanding of potential risks and security best practices within your development team. Regular training sessions and updates on emerging threats are critical.

• Feedback Integration:

Incorporate community feedback and audit findings to continuously refine and enhance the security architecture. Agile adaptation to new threats is essential for long-term protection.

As decentralized applications grow in complexity, the importance of robust security measures increases. While attackers continuously evolve their tactics, developers must remain proactive and innovative in implementing protective mechanisms. Proper deadline checks are a key component of a comprehensive security strategy – complemented by measures such as multisig authentication, time-based transaction limits, and sophisticated monitoring systems.

The correct implementation of deadline checks in smart contracts is crucial for avoiding financial losses and protecting against MEV-based attacks. Bob’s case study and the detailed risk analysis clearly demonstrate that even minor oversights in deadline validation can lead to significant disadvantages. By adopting strict technical measures, conducting regular audits – as performed by Bailsec – and fostering a strong security culture, these risks can be substantially reduced. Ultimately, such measures not only enhance overall security but also build stronger trust among users and investors.