A portion of stargate token rewards earned by StargateStrategy are permanently locked in the contract

[code423n4]

Lines of code

https://github.com/Tapioca-DAO/tapioca-yieldbox-strategies-audit/blob/05ba7108a83c66dada98bc5bc75cf18004f2a49b/contracts/stargate/StargateStrategy.sol#L236

Vulnerability details

Impact

Stargate token rewards are received during lpStaking.deposit but only accounted for in compound. As a result, token rewards earned during _deposited execution are permanently locked in the contract.

Proof of Concept

In lpStaking.deposit, any unclaimed rewards are transferred to the sender.

// lpStaking.deposit
if (user.amount > 0) {
    uint256 pending = user.amount.mul(pool.accStargatePerShare).div(1e12).sub(user.rewardDebt);
    safeStargateTransfer(msg.sender, pending);
}

In StargateStrategy, this deposit function is called in two places, compound and _stake (called by _deposited).

// _stake()
lpStaking.deposit(lpStakingPid, toStake);

// compound()
lpStaking.deposit(2, 0);

compound contains logic to process any newly acquired reward tokens earned from it's call to lpStaking.deposit.

// compound()
uint256 stgBalanceBefore = stgTokenReward.balanceOf(address(this));
lpStaking.deposit(2, 0);
uint256 stgBalanceAfter = stgTokenReward.balanceOf(address(this));

if (stgBalanceAfter > stgBalanceBefore) {
    uint256 stgAmount = stgBalanceAfter - stgBalanceBefore;

    ISwapper.SwapData memory swapData = swapper.buildSwapData(
        address(stgTokenReward),
        address(wrappedNative),
        stgAmount,
        0,
        false,
        false
    );
    uint256 calcAmount = swapper.getOutputAmount(swapData, "");
    uint256 minAmount = calcAmount - (calcAmount * 50) / 10_000; //0.5%

    swapper.swap(swapData, minAmount, address(this), "");

    uint256 queued = wrappedNative.balanceOf(address(this));
    _stake(queued);
}

_stake on the other hand, does not contain any logic to process reward tokens acquired from lpStaking.deposit.

As a result, since reward tokens are acquired during _deposited execution, but only the tokens acquired during compound execution are actually processed, all tokens acquired during _deposited execution are permanently locked in the contract.

Recommended Mitigation Steps

It is recommended that compound swaps the entire balance of reward tokens rather than just the newly acquired balance.

Assessed type

Token-Transfer

[c4-pre-sort]

minhquanym marked the issue as primary issue

[0xRektora]

Medium severity.

[c4-sponsor]

0xRektora marked the issue as disagree with severity

[c4-sponsor]

0xRektora marked the issue as sponsor confirmed

[c4-judge]

dmvt changed the severity to 2 (Med Risk)

[c4-judge]

dmvt marked the issue as selected for report

[c4-judge]

dmvt changed the severity to 3 (High Risk)

[c4-judge]

dmvt changed the severity to 2 (Med Risk)