diff --git a/packages/contracts/defindex-adapter/src/lib.rs b/packages/contracts/defindex-adapter/src/lib.rs
index 101cbc7c..449255d4 100644
--- a/packages/contracts/defindex-adapter/src/lib.rs
+++ b/packages/contracts/defindex-adapter/src/lib.rs
@@ -4,8 +4,8 @@ use adapter_common::{
     get_usdc, require_not_initialized, require_vault_auth, store_vault_and_usdc, AdapterError,
 };
 use soroban_sdk::{
-    contract, contractclient, contracterror, contractimpl, symbol_short, token::TokenClient, vec,
-    Address, Env, Symbol, Val, Vec,
+    contract, contractclient, contracterror, contractimpl, panic_with_error, symbol_short,
+    token::TokenClient, vec, Address, Env, Symbol, Val, Vec,
 };
 
 // ---------------------------------------------------------------------------
@@ -52,8 +52,10 @@ pub trait DefindexVaultInterface {
 pub enum ContractError {
     /// `initialize` was called on an adapter that already has a vault set.
     AlreadyInitialized = 1,
+    /// An intermediate arithmetic operation would overflow `i128`.
+    Overflow = 2,
     /// A state-mutating call was made before `initialize`.
-    NotInitialized = 2,
+    NotInitialized = 3,
 }
 
 impl From<AdapterError> for ContractError {
@@ -143,7 +145,10 @@ impl MeridianDefindexAdapter {
         let _ = client.deposit(&vec![&env, amount], &vec![&env, 0_i128], &adapter, &true);
         let shares_after = client.balance(&adapter);
 
-        shares_after - shares_before
+        match shares_after.checked_sub(shares_before) {
+            Some(delta) => delta,
+            None => panic_with_error!(&env, ContractError::Overflow),
+        }
     }
 
     /// Called by the vault to redeem `shares` dfTokens from the DeFindex vault.
@@ -236,6 +241,7 @@ mod tests {
     const MDV_USDC: Symbol = symbol_short!("MDV_USDC");
     const MDV_SH: Symbol = symbol_short!("MDV_SH");
     const MDV_WAMT: Symbol = symbol_short!("MDV_WAMT");
+    const MDV_FAULTY: Symbol = symbol_short!("MDV_FT");
 
     #[contract]
     pub struct MockDefindexVault;
@@ -269,8 +275,14 @@ mod tests {
             let amount = amounts_desired.get(0).unwrap_or(0);
             TokenClient::new(&env, &usdc).transfer(&from, &env.current_contract_address(), &amount);
 
+            let faulty: bool = env.storage().instance().get(&MDV_FAULTY).unwrap_or(false);
             let prev: i128 = env.storage().instance().get(&MDV_SH).unwrap_or(0);
-            env.storage().instance().set(&MDV_SH, &(prev + amount));
+            if faulty {
+                // Simulate a buggy vault whose balance decreases after a deposit.
+                env.storage().instance().set(&MDV_SH, &0);
+            } else {
+                env.storage().instance().set(&MDV_SH, &(prev + amount));
+            }
             Val::VOID.into()
         }
 
@@ -312,6 +324,17 @@ mod tests {
             env.storage().instance().get(&MDV_SH).unwrap_or(0)
         }
 
+        // Allows tests to directly set the reported balance, to simulate
+        // an external vault returning an unexpected balance (e.g. balance
+        // decreasing after a deposit, which would trigger the Overflow path).
+        pub fn set_balance(env: Env, balance: i128) {
+            env.storage().instance().set(&MDV_SH, &balance);
+        }
+
+        pub fn set_faulty(env: Env, faulty: bool) {
+            env.storage().instance().set(&MDV_FAULTY, &faulty);
+        }
+
         pub fn get_asset_amounts_per_shares(env: Env, desired_shares: i128) -> Vec<i128> {
             // 1:1 valuation, matching the deposit/withdraw rate used above.
             vec![&env, desired_shares]
@@ -538,4 +561,36 @@ mod tests {
         let recipient = Address::generate(&env);
         adapter.withdraw(&100_0000000_i128, &recipient);
     }
+
+    #[test]
+    #[should_panic(expected = "Error(Contract, #2)")]
+    fn deposit_panics_with_overflow_when_balance_decreases() {
+        // Simulates a buggy or malicious external vault whose balance()
+        // returns a lower value after deposit than before. The unchecked
+        // subtraction would have panicked with an opaque trap; now it
+        // panics with the typed Overflow error (discriminant #2).
+        let (env, vault, usdc_id, adapter, dfx) = setup();
+        let amount = 100_0000000_i128;
+
+        TokenClient::new(&env, &usdc_id).transfer(&vault, &adapter.address, &amount);
+
+        // First deposit succeeds normally.
+        adapter.deposit(&amount);
+
+        // Fund the adapter for the second deposit, then flip the mock into
+        // faulty mode: deposit will reset the share balance to zero,
+        // so shares_after (0) < shares_before (amount) → Overflow.
+        TokenClient::new(&env, &usdc_id).transfer(&vault, &adapter.address, &amount);
+        dfx.set_faulty(&true);
+
+        adapter.deposit(&amount);
+    }
+
+    #[test]
+    fn contract_error_has_expected_variants() {
+        // Compile-time check that the variants exist and are distinct.
+        let _ = ContractError::AlreadyInitialized;
+        let _ = ContractError::Overflow;
+        let _ = ContractError::NotInitialized;
+    }
 }