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code-423n4 / 2022-12-prepo-findings

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Mint might result in too few tokens minted #323

Closed code423n4 closed 1 year ago

code423n4 commented 1 year ago

Lines of code

https://github.com/prepo-io/prepo-monorepo/blob/3541bc704ab185a969f300e96e2f744a572a3640/apps/smart-contracts/core/contracts/PrePOMarket.sol#L65-L74

Vulnerability details

mint() of PrePOMarket.sol allows the team to mint new short and long tokens in exchange for collateral tokens. Long and short tokens are default ERC20 tokens with 18 decimals, while the collateral ERC20 token uses the decimals of the underlying base token.

However, in case the decimals of the collateral is smaller than the amount of decimals of the short/long tokens, the team will have to put up too much collateral for the amount of short/long tokens minted

For example, if the underlying base token of the collateral ERC20 uses 6 decimals (e.g. USDC), the team will receive only 1e6 short and long tokens for each 1e6 USDC (+- 1USD) deposited.

https://github.com/prepo-io/prepo-monorepo/blob/3541bc704ab185a969f300e96e2f744a572a3640/apps/smart-contracts/core/contracts/PrePOMarket.sol#L65-L74

Impact

The team will pay too much collateral for minting new short and long tokens. As only the team is able to mint new tokens, the impact is considered medium.

Proof of Concept

When using the mint() function of PrePOMarket.sol, the team will have to pay too much tokens in case the decimal amount of the underlying base token is smaller than 18.

Tool Used

Manual Review

Recommended Mitigation Steps

There are multiple solution for this problem:

Picodes commented 1 year ago

This is correct, but what is the impact ? Decimals are just a convention, so it's no a real issue if 1 USDC = 1e-12 short tokens if it doesn't break anything

c4-judge commented 1 year ago

Picodes marked the issue as unsatisfactory: Insufficient proof