Explain the Difference between an Overflow and an Underflow.
An overflow occurs when the result of an arithmetic operation, typically addition or multiplication, is larger than the maximum value that the data type can hold. For instance, if a variable can hold up to 255, and you add 1 to 255, it overflows and wraps to 0.
An underflow occurs when the result of a subtraction is smaller than the minimum value the data type can hold, which is typically zero for unsigned integers. Subtracting 1 from 0 causes an underflow and wraps to the maximum value.
Glossar
Maximum Value
Threshold ⎊ This denotes the upper boundary of a variable, such as the highest price or notional amount, that a system or contract is designed to handle or process within defined operational parameters.
Uint256
Data ⎊ Uint256 is a data type representing an unsigned integer with a maximum value of 2^256 - 1.
Minimum Value
Floor ⎊ This represents the lowest acceptable boundary for a variable, often related to collateral ratios, minimum trade sizes, or the lowest permissible price point before specific automated actions are triggered.
The Dao Hack
Event ⎊ The Dao Hack was a seminal security incident involving the exploitation of a reentrancy vulnerability in a decentralized autonomous organization's contract, resulting in the draining of a significant portion of its Ether holdings.