arXiv:2610.41685v1 Announce Type: new Abstract: Smart contracts are a core component of blockchain systems, but their immutability makes failures in deployed code catastrophic and irreversible. Existing work classifies vulnerabilities, defects, and attacks, yet the observable failures of smart contracts, the deviations from intended behavior or the expected ledger state seen once a contract is deployed, have been largely disregarded. In this paper, we design and validate a failure mode taxonomy for Ethereum smart contracts, together with a severity model that ranks failures by their observable impact. Using a literature review as input, we follow the taxonomy development method of Nickerson et al. to derive the failure modes and their dimensions, and we subject the resulting taxonomy to a saturation exercise over a systematic literature review, the OpenSCV vulnerability catalog, and smart contract incidents reported after the search cutoff. Each failure mode is characterized along five dimensions, namely root cause, violated security property, impact (recorded as primary, secondary, and other), affected component, and nature, and is given a standardized name targeting the observable malfunction rather than the underlying vulnerability. From the taxonomy, we derive CIPER, a five-level severity model that groups failure modes by their observable impact. The saturation exercise produced no new failure modes or dimensions. The taxonomy offers a shared vocabulary for describing what smart contracts do wrong when they fail, and CIPER links that vocabulary to the severity of each observable outcome.