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code-423n4 / 2023-07-pooltogether-findings

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First ERC4626 deposit can break share calculation #136

Closed code423n4 closed 1 year ago

code423n4 commented 1 year ago

Lines of code

https://github.com/GenerationSoftware/pt-v5-vault/blob/b1deb5d494c25f885c34c83f014c8a855c5e2749/src/Vault.sol#L407

Vulnerability details

Impact

ERC4626 vault share price can be maliciously inflated on the initial deposit, leading to the next depositor losing assets due to precision issues.

The first depositor of an ERC4626 vault can maliciously manipulate the share price by depositing the lowest possible amount (1 wei) of liquidity and then artificially inflating ERC4626.totalAssets.

Given a vault with DAI as the underlying asset:

Alice (attacker) deposits initial liquidity of 1 wei DAI Alice receives 1e18 (1 wei) vault shares Alice transfers 1 ether of DAI via transfer() to the vault to artificially inflate the asset balance without minting new shares. The asset balance is now 1 ether + 1 wei DAI -> vault share price is now very high (= 1000000000000000000001 wei ~ 1000 * 1e18) Bob (victim) deposits 100 ether DAI Bob receives 0 shares Bob receives 0 shares due to a precision issue. His deposited funds are lost.

Tools Used

Manual Review

Recommended Mitigation Steps

This is a well-known issue, Uniswap and other protocols had similar issues when supply == 0.

For the first deposit, mint a fixed amount of shares, e.g. 10**decimals()

Assessed type

ERC4626

c4-judge commented 1 year ago

Picodes marked the issue as unsatisfactory: Invalid