Users can get a flashloan via `USDO.flashLoan()`, without paying fees

[code423n4]

Lines of code

https://github.com/Tapioca-DAO/tapioca-bar-audit/blob/2286f80f928f41c8bc189d0657d74ba83286c668/contracts/usd0/USDO.sol#L90 https://github.com/Tapioca-DAO/tapioca-bar-audit/blob/2286f80f928f41c8bc189d0657d74ba83286c668/contracts/usd0/USDO.sol#L64-L69

Vulnerability details

Impact

When a user calls USDO.flashLoan(), their fee is calculated (on line 90 USDO.sol) via USDO.flashFee() based on the function param amount.

If the user chooses a very small amount, the calculated fee in USDO.flashFee() will be rounded down to 0 (line 69 USDO.sol), due to the nominator (amount * flashMintFee) being smaller than the denominator FLASH_MINT_FEE_PRECISION.

So for small amounts the protocol doesn't charge a fee to the user.

Since there exists a reentrancy attack vector in the codebase of the USDO.sol contract, that I submitted as a different report, the issue with the fee calculation can be exploited in order to flash loan huge amounts of USDO without paying any fees. Especially, the USDO should be deployed on a chain with less gas fees, it might be cheaper to avoid the loan fees by reentering.

I don't consider this report to be a duplicate, since the mitigation for this issue has to be done differently.

Proof of Concept

Here is a POC that shows the exploit:

https://gist.github.com/zzzitron/c9382502c71fb353afc1210115d5a21a

To run the exploit add this malicious contract into the contracts folder:

https://gist.github.com/zzzitron/d2be7c2d688b6c3df663ace9ef3d49b9

Tools Used

Manual review

Recommended Mitigation Steps

consider rounding up the fees

Assessed type

Math

[c4-pre-sort]

minhquanym marked the issue as low quality report

[minhquanym]

Consider QA level

[c4-judge]

dmvt changed the severity to QA (Quality Assurance)

[c4-judge]

dmvt marked the issue as grade-b