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Audit Report

Pitfalls

Missing Input or Precondition Checks

Missing input or precondition checks are crucial safeguards that validate the information and conditions provided by users before executing any financial transactions. These checks confirm that borrowers and lenders meet the necessary requirements and provide accurate data, preventing malicious or erroneous actions within the pool.

Key Aspects

  1. Asset Eligibility: Ensuring that the assets proposed for borrowing or lending align with the contract's predefined criteria and supported asset list.

  2. Collateral Adequacy: Assessing whether borrowers have provided sufficient collateral to secure their loans, thereby reducing the risk of default.

  3. Loan Terms Validation: Validating the terms outlined in the loan agreement, encompassing elements such as interest rates, repayment schedules, and other contractual obligations.

  4. Access Control: Implementing access controls to limit specific contract functions based on user roles and permissions, ensuring only authorized actions are executed.

  5. Token Approval Verification: Verifying that users have granted approval for the contract to interact with their tokens or assets, preventing unauthorized token transfers.

  6. Data Consistency Check: Confirming that the inputs and parameters align with the contract's expected format and adhere to defined standards, maintaining data integrity and contract reliability.

These checks are integral to the security and reliability of a lender pool smart contract, safeguarding the interests of all participants and reducing the potential for exploits or unintended consequences.

Phishing Vulnerabilities With Transactions Origin

Phishing vulnerability with transactions origin refers to a security weakness that arises when a contract relies on the tx.origin property to determine the sender of a transaction. This vulnerability can be exploited by malicious actors to impersonate legitimate users and perform unauthorized actions within the contract.

Understanding:

  1. Tx.Origin: In Ethereum and other blockchain platforms, every transaction has a sender, which is referred to as msg.sender. Additionally, there is a property called tx.origin, which represents the original sender of a transaction, even if the transaction is relayed through multiple contracts. It is essentially the external user or externally owned account (EOA) that initiated the transaction.

  2. Exploiting the Vulnerability: If a smart contract relies solely on tx.origin to authenticate users or determine access control, it can become vulnerable to phishing attacks. Malicious actors can create contracts that manipulate the tx.origin value before interacting with the vulnerable contract.

  3. Impersonation and Unauthorized Actions: By manipulating tx.origin, attackers can impersonate legitimate users or even contract addresses, making the vulnerable contract believe that the malicious contract is actually the legitimate user. This can lead to unauthorized actions, such as fund transfers, changes in contract state, or other malicious activities.

  4. VulnerableLenderPool.sol:

// Vulnerable code snippet
function setFeePercent(uint256 _percent) external {
    require(tx.origin == owner, "Only owner");
    feePercent = _percent;
}

In this vulnerable code snippet, the setFeePercent function is designed to allow only the contract owner to update the feePercent value. It checks the tx.origin to verify that the transaction initiator is the owner. However, relying on tx.origin for access control can introduce a phishing vulnerability.

The vulnerability arises from the fact that tx.origin returns the address of the external account that initiated the transaction, rather than the address of a contract calling the function. This makes the contract susceptible to phishing attacks. An attacker can deploy a malicious contract that calls setFeePercent, and because the tx.origin will be the attacker's external address, the requirement check will pass, allowing the attacker to change the feePercent value.

Smart contract developers must use msg.sender and robust access controls to prevent attackers from manipulating tx.origin and impersonating users or contracts, preventing unauthorized actions.

Incorrect Calculation Of Output Token Amount

Incorrect calculation of tutput token amount vulnerability refers to a situation in a smart contract where the calculation of output token amounts during a transaction is done incorrectly or improperly. This can lead to unexpected and potentially harmful outcomes, such as loss of funds or unintended transfers.

Common Causes:

  1. Mathematical Errors: Errors in mathematical operations within the contract code can result in the incorrect calculation of token amounts. For example, a mistake in dividing or multiplying values can lead to imprecise results.

  2. External Data Dependency: Smart contracts often depend on external data sources, such as price feeds or user inputs. If these external data sources are manipulated or unreliable, it can lead to incorrect token amount calculations.

  3. VulnerableLenderPool.sol:

// Vulnerable code snippet
function getFee(uint256 _borrowAmount) public view returns (uint256) {
    return (_borrowAmount * (feePercent / 100));
}

In this vulnerable code snippet, the getFee function attempts to calculate a fee based on a percentage (feePercent) of the _borrowAmount. However, there is a vulnerability in the calculation because the division operation (feePercent / 100) is performed with integer division in Solidity, which truncates the result. If feePercent is not a multiple of 100, this can lead to incorrect fee calculations.

For example, if feePercent is 3 (indicating a 3% fee), the result of (3 / 100) will be 0 instead of 0.03. As a result, the fee calculation will always be zero, which is incorrect.

In this example, the function calculateTokenAmount does not use safe math operations, making it susceptible to overflow vulnerabilities when inputAmount or rate is sufficiently large.

Vigilance in identifying and mitigating this vulnerability is crucial for ensuring the integrity of decentralized applications.

Timestamp Manipulation

Timestamp manipulation vulnerability refers to a situation in a smart contract where the usage of the block.timestamp for generating randomness or making decisions is susceptible to manipulation by miners or malicious actors. This can lead to unfair outcomes, security risks, and potentially harmful consequences.

Root Causes:

  1. Miner Manipulation: Miners can adjust the block.timestamp to some extent when they create a block. This adjustment allows them to influence the outcome of functions or conditions that rely on timestamps.

  2. Dependence on block.timestamp: Contracts that heavily rely on block.timestamp for decision-making, randomness generation, or time-based conditions are more susceptible to this vulnerability.

  3. Lack of Secure Randomness: Failure to use a secure and tamper-resistant source of randomness in the contract can lead to timestamp manipulation vulnerabilities.

VulnerableLenderPool.sol:

// Vulnerable code snippet
function getRandomRecipient(uint256 _fee) public {
    bytes32 result = keccak256(
        abi.encodePacked(
            uint256(block.difficulty),
            uint256(block.timestamp)
        )
    );
    uint256 randomNumber = uint256(result) % positionCount;

    payable(positionToDepositor[randomNumber + 1]).transfer(_fee);
}

In this vulnerable code snippet, the getRandomRecipient function attempts to generate randomness using block.timestamp. However, this is problematic because miners can manipulate the timestamp to their advantage, potentially influencing the selection of the recipient for the fee payment.

Addressing this vulnerability is crucial for maintaining the fairness and security of decentralized applications that depend on random or time-based processes.

Block Gas Limit

A block gas limit vulnerability in a smart contract refers to a situation where the gas required to execute a transaction that interacts with the contract exceeds the maximum gas limit set for a block on the Ethereum blockchain. This can result in transaction failures, reverts, or potential exploits by malicious actors.

Issues:

  1. Excessive Gas Consumption: Contracts with inefficient or computationally expensive operations may consume more gas than is available in a single Ethereum block, leading to transaction failures.

  2. Infinite Loops: Smart contracts that contain loops without proper exit conditions or gas constraints can cause transactions to run indefinitely, eventually hitting the gas limit.

  3. Large Data Operations: Contracts that manipulate or process large amounts of data can exceed the gas limit due to the high computational cost of these operations.

VulnerableLenderPool.sol:

// Vulnerable code snippet
function deposit() external payable {
    require(msg.value > 0, "Deposit must be greater than zero");
    uint256 _positionCount = positionCount;
    uint256 _deposits;
    while (_deposits < msg.value / positionAmount) {
        _deposits++;
        positionLocations[msg.sender].push(_positionCount + _deposits);
        positionToDepositor[_positionCount + _deposits] = msg.sender;
    }
    positionCount += _deposits;
}

In this vulnerable code snippet, the deposit function allows users to deposit funds into the contract. However, it contains a while loop that iterates based on the value of msg.value / positionAmount. If msg.value is substantial, this loop may execute a large number of times, potentially consuming more gas than the Ethereum block gas limit allows, leading to transaction failures.

It is essential to optimize the contract code, reduce gas consumption, and consider implementing gas limits or constraints on loop iterations to ensure that transactions remain within the gas limits imposed by the Ethereum network. This helps maintain the reliability and security of the contract.