Paper 2021/1147

Clockwork Finance: Automated Analysis of Economic Security in Smart Contracts

Kushal Babel, Philip Daian, Mahimna Kelkar, and Ari Juels


We introduce the Clockwork Finance Framework (CFF), a general purpose, formal verification framework for mechanized reasoning about the economic security properties of composed decentralized-finance (DeFi) smart contracts. CFF features three key properties. It is contract complete, meaning that it can model any smart contract platform and all its contracts---Turing complete or otherwise. It does so with asymptotically optimal model size. It is also attack-exhaustive by construction, meaning that it can automatically and mechanically extract all possible economic attacks on users' cryptocurrency across modeled contracts. Thanks to these properties, CFF can support multiple goals: economic security analysis of contracts by developers, analysis of DeFi trading risks by users, and optimization of arbitrage opportunities by bots or miners. Because CFF offers composability, it can support these goals with reasoning over any desired set of potentially interacting smart contract models. We instantiate CFF as an executable model for Ethereum contracts that incorporates a state-of-the-art deductive verifier. Building on previous work, we introduce extractable value (EV), a new formal notion of economic security in composed DeFi contracts that is both a basis for CFF analyses and of general interest. We construct modular, human-readable, composable CFF models of four popular, deployed DeFi protocols in Ethereum: Uniswap, Uniswap V2, Sushiswap, and MakerDAO, representing a combined 17 billion USD in value as of August 2021. We uses these models to show experimentally that CFF is practical and can drive useful, data-based EV-based insights from real world transaction activity. Without any explicitly programmed attack strategies, CFF uncovers on average an expected $56 million of EV per month in the recent past.

Available format(s)
Publication info
Preprint. Minor revision.
DeFi securitysmart contractscomposability
Contact author(s)
babel @ cs cornell edu
phil @ cs cornell edu
mahimna @ cs cornell edu
2021-09-10: received
Short URL
Creative Commons Attribution


      author = {Kushal Babel and Philip Daian and Mahimna Kelkar and Ari Juels},
      title = {Clockwork Finance: Automated Analysis of Economic Security in Smart Contracts},
      howpublished = {Cryptology ePrint Archive, Paper 2021/1147},
      year = {2021},
      note = {\url{}},
      url = {}
Note: In order to protect the privacy of readers, does not use cookies or embedded third party content.