c4-bot-8 commented 6 months ago

Lines of code

https://github.com/code-423n4/2024-04-renzo/blob/519e518f2d8dec9acf6482b84a181e403070d22d/contracts/Oracle/RenzoOracle.sol#L85 https://github.com/code-423n4/2024-04-renzo/blob/519e518f2d8dec9acf6482b84a181e403070d22d/contracts/Bridge/L2/Oracle/RenzoOracleL2.sol#L50

Vulnerability details

Description

Chainlink aggregators have a built in circuit breaker if the price of an asset goes outside of a predetermined price band. The result is that if an asset experiences a huge drop in value (i.e. LUNA crash) the price of the oracle will continue to return the minPrice instead of the actual price of the asset. This would allow user to continue borrowing with the asset but at the wrong price. This is exactly what happened to Venus on BSC when LUNA imploded.

Vulnerability Details

ChainlinkAdapterOracle uses the ChainlinkFeedRegistry to obtain the price of the requested tokens.

function latestRoundData(
  address base,
  address quote
)
  external
  view
  override
  checkPairAccess()
  returns (
    uint80 roundId,
    int256 answer,
    uint256 startedAt,
    uint256 updatedAt,
    uint80 answeredInRound
  )
{
  uint16 currentPhaseId = s_currentPhaseId[base][quote];
  //@audit this pulls the Aggregator for the requested pair
  AggregatorV2V3Interface aggregator = _getFeed(base, quote);
  require(address(aggregator) != address(0), "Feed not found");
  (
    roundId,
    answer,
    startedAt,
    updatedAt,
    answeredInRound
  ) = aggregator.latestRoundData();
  return _addPhaseIds(roundId, answer, startedAt, updatedAt, answeredInRound, currentPhaseId);
}

ChainlinkFeedRegistry#latestRoundData pulls the associated aggregator and requests round data from it. ChainlinkAggregators have minPrice and maxPrice circuit breakers built into them. This means that if the price of the asset drops below the minPrice, the protocol will continue to value the token at minPrice instead of it's actual value. This will allow users to take out huge amounts of bad debt and bankrupt the protocol.

Example: TokenA has a minPrice of $1. The price of TokenA drops to $0.10. The aggregator still returns $1 allowing the user to borrow against TokenA as if it is $1 which is 10x it's actual value.

Note: Chainlink oracles are used a just one piece of the OracleAggregator system and it is assumed that using a combination of other oracles, a scenario like this can be avoided. However this is not the case because the other oracles also have their flaws that can still allow this to be exploited. As an example if the chainlink oracle is being used with a UniswapV3Oracle which uses a long TWAP then this will be exploitable when the TWAP is near the minPrice on the way down. In a scenario like that it wouldn't matter what the third oracle was because it would be bypassed with the two matching oracles prices. If secondary oracles like Band are used a malicious user could DDOS relayers to prevent update pricing. Once the price becomes stale the chainlink oracle would be the only oracle left and it's price would be used.

Proof of Concept

Present price of TokenA is $10
TokenA has a minimum price set at $1 on chainlink
The actual price of TokenA dips to $0.10
The aggregator continues to report $1 as the price.

Consequently, users can interact with protocol using TokenA as though it were still valued at $1, which is a tenfold overestimate of its real market value.

Impact

In the event that an asset crashes (i.e. LUNA) the protocol can be manipulated to give out loans at an inflated price

Tools Used

Manual Review

Recommended Mitigation Steps

Since there is going to be a whitelist of tokens to be added, the minPrice/maxPrice could be checked and a revert could be made when this is returned by chainlink or a fallback oracle that does not have circuit breakers could be implemented in that case

Assessed type

Oracle

raymondfam commented 6 months ago

@howlbot reject