code423n4 commented 2 years ago

Lines of code

https://github.com/code-423n4/2022-04-backd/blob/c856714a50437cb33240a5964b63687c9876275b/backd/contracts/actions/topup/TopUpAction.sol#L50 https://github.com/code-423n4/2022-04-backd/blob/c856714a50437cb33240a5964b63687c9876275b/backd/contracts/pool/LiquidityPool.sol#L721

Vulnerability details

OpenZeppelin's safeApprove() will revert if the account already is approved and the new safeApprove() is done with a non-zero value

    function safeApprove(
        IERC20 token,
        address spender,
        uint256 value
    ) internal {
        // safeApprove should only be called when setting an initial allowance,
        // or when resetting it to zero. To increase and decrease it, use
        // 'safeIncreaseAllowance' and 'safeDecreaseAllowance'
        require(
            (value == 0) || (token.allowance(address(this), spender) == 0),
            "SafeERC20: approve from non-zero to non-zero allowance"
        );
        _callOptionalReturn(token, abi.encodeWithSelector(token.approve.selector, spender, value));
    }

https://github.com/OpenZeppelin/openzeppelin-contracts/blob/fcf35e5722847f5eadaaee052968a8a54d03622a/contracts/token/ERC20/utils/SafeERC20.sol#L45-L58

Impact

Customers can be prevented from register()ing the same token/stakerVaultAddress as another customer; and once changed away from, stakers and lptokens can't be used in the future.

Proof of Concept

There are multiple places where safeApprove() is called a second time without setting the value to zero first.

register() calls lockFunds() for each user registration, and since users will use the same tokens and staker vaults, the second user's register() call will fail:

File: backd/contracts/actions/topup/TopUpAction.sol   #1

36       function lockFunds(
37           address stakerVaultAddress,
38           address payer,
39           address token,
40           uint256 lockAmount,
41           uint256 depositAmount
42       ) external {
43           uint256 amountLeft = lockAmount;
44           IStakerVault stakerVault = IStakerVault(stakerVaultAddress);
45   
46           // stake deposit amount
47           if (depositAmount > 0) {
48               depositAmount = depositAmount > amountLeft ? amountLeft : depositAmount;
49               IERC20(token).safeTransferFrom(payer, address(this), depositAmount);
50               IERC20(token).safeApprove(stakerVaultAddress, depositAmount);

https://github.com/code-423n4/2022-04-backd/blob/c856714a50437cb33240a5964b63687c9876275b/backd/contracts/actions/topup/TopUpAction.sol#L36-L50

The changing of either the staker or an lp token is behind a time-lock, and once the time has passed, the changed variables rely on this function:

File: backd/contracts/pool/LiquidityPool.sol   #2

717       function _approveStakerVaultSpendingLpTokens() internal {
718           address staker_ = address(staker);
719           address lpToken_ = address(lpToken);
720           if (staker_ == address(0) || lpToken_ == address(0)) return;
721           IERC20(lpToken_).safeApprove(staker_, type(uint256).max);
722       }

https://github.com/code-423n4/2022-04-backd/blob/c856714a50437cb33240a5964b63687c9876275b/backd/contracts/pool/LiquidityPool.sol#L717-L722

If a bug is found in a new staker or lpToken and the governor wishes to change back to the old one(s), the governor will have to wait for the time-lock delay only to find out that the old value(s) cause the code to revert.

I've filed the other more-severe instances as a separate high-severity issue, and flagged the remaining low-severity instances in my QA report

Tools Used

Code inspection

Recommended Mitigation Steps

Always do safeApprove(0) if the allowance is being changed, or use safeIncreaseAllowance()

samwerner commented 2 years ago

It should be noted that the second example referring to _approveStakerVaultSpendingLpTokens() is not an issue. This is neither a member variable that can be updated nor is it behind a time lock. Both the staker and lpToken can only be set once and hence the safeApprove in the aforementioned function can only be called once.

chase-manning commented 2 years ago

https://github.com/backdfund/protocol/pull/280

code-423n4 / 2022-04-backd-findings