CVE-2025-21607 is a medium-severity vulnerability affecting versions of the Vyper smart contract language prior to 0.4.1. Vyper is a Pythonic language used to write smart contracts for the Ethereum Virtual Machine (EVM). The vulnerability arises from improper control flow handling in the Vyper compiler when invoking two specific EVM precompiled contracts: EcRecover (address 0x1) and Identity (address 0x4). These precompiles are commonly used for cryptographic signature recovery and data copying, respectively. The compiler fails to check the success flag returned by these calls, which indicates whether the precompile executed successfully or failed. An attacker can exploit this by manipulating the gas supplied to these calls, causing them to fail deliberately while allowing the overall contract execution to continue. Due to the EVM's gas forwarding rules, after a failed precompile call, only 1/64 of the original gas remains for subsequent execution, limiting the complexity of any following operations. This gas constraint reduces the practical impact of the vulnerability, as only simple instructions can run after the failure, and no significant real-world contract exploits have been identified. Nonetheless, the flaw represents an incorrect control flow implementation (CWE-670) that could lead to incorrect execution results or logic errors in smart contracts relying on these precompiles. The issue was addressed and fixed in Vyper version 0.4.1. No known exploits are currently reported in the wild, and the advisory is issued as a precautionary measure to encourage updating to the patched version.

For European organizations utilizing Vyper to develop or deploy Ethereum smart contracts, this vulnerability could lead to subtle contract execution errors or logic flaws if they use versions prior to 0.4.1 and rely on the EcRecover or Identity precompiles. While the limited gas after a failed precompile call restricts the complexity of potential exploits, incorrect control flow could still cause unintended contract behavior, potentially affecting contract integrity and reliability. This may result in financial discrepancies, loss of trust, or operational disruptions in decentralized finance (DeFi) applications, token management, or other blockchain-based services. Given the growing adoption of blockchain technologies in Europe, especially in fintech hubs and enterprises exploring decentralized applications, the vulnerability could undermine contract correctness and security if unpatched. However, the absence of known exploits and the gas limitation reduces the immediate risk of large-scale attacks. The impact is primarily on contract integrity and availability rather than confidentiality, as smart contracts are public by design. Organizations relying on Vyper should prioritize patching to prevent any latent risks and maintain the robustness of their smart contract deployments.

1. Upgrade all Vyper compiler instances to version 0.4.1 or later to ensure the vulnerability is patched. 2. Audit existing smart contracts compiled with vulnerable Vyper versions, especially those using EcRecover and Identity precompiles, to identify any logic that could be affected by unchecked call success flags. 3. Implement additional runtime checks within smart contracts to verify the success of external calls explicitly, rather than relying solely on compiler behavior. 4. Employ comprehensive testing frameworks that simulate gas constraints and failure scenarios of precompile calls to detect potential incorrect control flows before deployment. 5. For organizations providing smart contract development services, integrate this vulnerability check into continuous integration pipelines and security code reviews. 6. Monitor blockchain activity for anomalous transactions that may exploit this vulnerability, although no known exploits exist currently. 7. Educate developers on the importance of handling call success flags and gas management in EVM smart contracts to prevent similar issues.