Sunnyboy95 - Security Enhancements and Best Practices Implementation for `EbtcLeverageZapRouter` Contract

[c4-bot-5]

Lines of code

https://github.com/code-423n4/2024-06-badger/blob/9173558ee1ac8a78a7ae0a39b97b50ff0dd9e0f8/ebtc-zap-router/src/interface/IEbtcLeverageZapRouter.sol#L4-L51

Vulnerability details

Impact

Impact of Security Issues in EbtcLeverageZapRouter Contract

Failing to address the security issues and best practices in the EbtcLeverageZapRouter contract can lead to significant financial and operational consequences. Potential impacts include:

• Financial Loss: Vulnerabilities such as reentrancy attacks, unchecked external calls, integer overflow/underflow, improper input validation, and flash loan attacks can be exploited by malicious actors, leading to substantial financial losses for both users and the contract itself.

• Operational Disruption: Exploits and attacks can cause significant downtime and operational disruptions, affecting the reliability and functionality of the contract. Unauthorized actions due to insufficient access control can further destabilize operations

• Reputation Damage: The exploitation of security vulnerabilities can severely damage the reputation of the contract and its developers, resulting in a loss of trust from users and the broader community. This can lead to decreased user adoption and engagement.

• Legal and Compliance Risks: Non-compliance with industry standards and regulations due to insufficient security measures and documentation can expose the project to legal consequences, further impacting its viability and reputation.

• Reduced Transparency and Accountability: Lack of event emission and insufficient documentation make it challenging to track contract activities, audit for security issues, and perform necessary maintenance and upgrades, leading to reduced transparency and accountability.

Overall, the impact of not addressing these security issues can be catastrophic, encompassing financial loss, operational disruption, reputation damage, legal risks, and diminished transparency. Implementing robust security measures and best practices is crucial to protect the contract and its stakeholders.

// SPDX-License-Identifier: UNLICENZED
pragma solidity ^0.8.17;

import {IEbtcZapRouterBase} from "./IEbtcZapRouterBase.sol";
/// @notice new imports for you
import "@openzeppelin/contracts/access/Ownable.sol";
import "@openzeppelin/contracts/security/ReentrancyGuard.sol";

interface IEbtcLeverageZapRouter is IEbtcZapRouterBase, Ownable, ReentrancyGuard { 

POC steps:

Here, we provide a proof of concept for implementing security enhancements and best practices in the EbtcLeverageZapRouter contract. This example demonstrates how to address potential vulnerabilities such as Reentrancy, unchecked external calls, Access control issues, and more.

• Implement Access Control with Ownable Use OpenZeppelin’s Ownable to restrict function access to the contract owner.

• Prevent Reentrancy with ReentrancyGuard Use OpenZeppelin’s ReentrancyGuard to prevent reentrancy attacks.

• Validate Inputs Ensure that all function parameters are validated before execution.

• Emit Events Emit events for critical actions to improve transparency and traceability.

• Check External Call Return Values Always handle the return values of external calls safely.

// SPDX-License-Identifier: MIT
pragma solidity ^0.8.17;

import {IEbtcZapRouterBase} from "./IEbtcZapRouterBase.sol";
import "@openzeppelin/contracts/access/Ownable.sol";
import "@openzeppelin/contracts/security/ReentrancyGuard.sol";

contract EbtcLeverageZapRouter is IEbtcLeverageZapRouter, Ownable, ReentrancyGuard {
    // State variables, mappings, and other required contracts/interfaces

    // Events
    event CdpOpened(
        bytes32 indexed cdpId,
        address indexed owner,
        uint256 debt,
        uint256 stEthLoanAmount,
        uint256 stEthMarginAmount,
        uint256 stEthDepositAmount
    );

    event CdpClosed(
        bytes32 indexed cdpId,
        address indexed owner
    );

    event CdpAdjusted(
        bytes32 indexed cdpId,
        address indexed owner,
        uint256 debtChange,
        uint256 stEthBalanceChange
    );

    // Example function with improved security
    function openCdp(
        uint256 _debt,
        bytes32 _upperHint,
        bytes32 _lowerHint,
        uint256 _stEthLoanAmount,
        uint256 _stEthMarginAmount,
        uint256 _stEthDepositAmount,
        bytes calldata _positionManagerPermit,
        TradeData calldata _tradeData
    ) external nonReentrant onlyOwner returns (bytes32 cdpId) {
        require(_debt > 0, "Debt must be greater than 0");
        require(_stEthLoanAmount > 0, "stEthLoanAmount must be greater than 0");
        require(_stEthDepositAmount > 0, "stEthDepositAmount must be greater than 0");

        // Logic to open a CDP with proper validation and security checks
        // ...

        // Emit event for tracking
        emit CdpOpened(cdpId, msg.sender, _debt, _stEthLoanAmount, _stEthMarginAmount, _stEthDepositAmount);

        return cdpId;
    }

    function closeCdp(
        bytes32 _cdpId,
        bytes calldata _positionManagerPermit,
        TradeData calldata _tradeData
    ) external nonReentrant onlyOwner {
        // Validate inputs
        require(_cdpId != bytes32(0), "Invalid CDP ID");

        // Logic to close a CDP with proper validation and security checks
        // ...

        // Emit event for tracking
        emit CdpClosed(_cdpId, msg.sender);
    }

    function adjustCdp(
        bytes32 _cdpId,
        AdjustCdpParams calldata params,
        bytes calldata _positionManagerPermit,
        TradeData calldata _tradeData
    ) external nonReentrant onlyOwner {
        // Validate inputs
        require(_cdpId != bytes32(0), "Invalid CDP ID");
        require(params.debtChange > 0, "Debt change must be greater than 0");
        require(params.stEthBalanceChange > 0, "stETH balance change must be greater than 0");

        // Logic to adjust a CDP with proper validation and security checks
        // ...

        // Emit event for tracking
        emit CdpAdjusted(_cdpId, msg.sender, params.debtChange, params.stEthBalanceChange);
    }

    // Other functions implementing similar security practices
}

Tools Used

Manual review.

Recommended Mitigation Steps

To enhance the security of the EbtcLeverageZapRouter contract, here are the recommended mitigation steps, along with brief explanations for each:

1. Implement Reentrancy Guard

• Use OpenZeppelin’s ReentrancyGuard to protect functions from reentrancy attacks.

• Code Implementation:

import "@openzeppelin/contracts/security/ReentrancyGuard.sol";

contract EbtcLeverageZapRouter is IEbtcLeverageZapRouter, Ownable, ReentrancyGuard {
    // Apply the nonReentrant modifier to state-changing functions
    function openCdp(
        uint256 _debt,
        bytes32 _upperHint,
        bytes32 _lowerHint,
        uint256 _stEthLoanAmount,
        uint256 _stEthMarginAmount,
        uint256 _stEthDepositAmount,
        bytes calldata _positionManagerPermit,
        TradeData calldata _tradeData
    ) external nonReentrant onlyOwner returns (bytes32 cdpId) {
        // Function implementation
    }
}

2. Use Access Control with Ownable

• Restrict sensitive functions to only be called by the contract owner.

import "@openzeppelin/contracts/access/Ownable.sol";

contract EbtcLeverageZapRouter is IEbtcLeverageZapRouter, Ownable, ReentrancyGuard {
    // Ensure only the owner can call critical functions
    function openCdp(
        uint256 _debt,
        bytes32 _upperHint,
        bytes32 _lowerHint,
        uint256 _stEthLoanAmount,
        uint256 _stEthMarginAmount,
        uint256 _stEthDepositAmount,
        bytes calldata _positionManagerPermit,
        TradeData calldata _tradeData
    ) external nonReentrant onlyOwner returns (bytes32 cdpId) {
        // Function implementation
    }
}

3. Thorough Input Validation

• Validate all input parameters to ensure they meet expected conditions.

function openCdp(
    uint256 _debt,
    bytes32 _upperHint,
    bytes32 _lowerHint,
    uint256 _stEthLoanAmount,
    uint256 _stEthMarginAmount,
    uint256 _stEthDepositAmount,
    bytes calldata _positionManagerPermit,
    TradeData calldata _tradeData
) external nonReentrant onlyOwner returns (bytes32 cdpId) {
    require(_debt > 0, "Debt must be greater than 0");
    require(_stEthLoanAmount > 0, "stEthLoanAmount must be greater than 0");
    require(_stEthDepositAmount > 0, "stEthDepositAmount must be greater than 0");

    // Function implementation
}

4. Emit Events for Critical Actions

• Emit events to log significant actions such as opening, closing, and adjusting CDPs.

event CdpOpened(
    bytes32 indexed cdpId,
    address indexed owner,
    uint256 debt,
    uint256 stEthLoanAmount,
    uint256 stEthMarginAmount,
    uint256 stEthDepositAmount
);

function openCdp(
    uint256 _debt,
    bytes32 _upperHint,
    bytes32 _lowerHint,
    uint256 _stEthLoanAmount,
    uint256 _stEthMarginAmount,
    uint256 _stEthDepositAmount,
    bytes calldata _positionManagerPermit,
    TradeData calldata _tradeData
) external nonReentrant onlyOwner returns (bytes32 cdpId) {
    // Function implementation
    emit CdpOpened(cdpId, msg.sender, _debt, _stEthLoanAmount, _stEthMarginAmount, _stEthDepositAmount);
}

5. Check External Call Return Values

• Always check the return values of external calls and handle errors appropriately.

function someFunctionThatCallsExternal(address externalContract) external {
    (bool success, bytes memory data) = externalContract.call(abi.encodeWithSignature("someFunction()"));
    require(success, "External call failed");
}

6. Implement Flash Loan Attack Mitigations

• Ensure that the logic involving flash loans does not allow for arbitrage or manipulation.

function executeFlashLoanOperation(uint256 amount) external {
    // Ensure proper accounting and state changes
    uint256 initialBalance = address(this).balance;

    // Execute flash loan logic
    // ...

    // Validate the state after flash loan operation
    require(address(this).balance >= initialBalance, "Flash loan operation failed to return funds");
}

7. Provide Comprehensive Documentation

• Include comments and documentation to describe the purpose and usage of each function and critical pieces of logic.

• Example.

/**
 * @notice Opens a new CDP (Collateralized Debt Position)
 * @param _debt The amount of debt to be issued
 * @param _upperHint The upper hint for the new CDP
 * @param _lowerHint The lower hint for the new CDP
 * @param _stEthLoanAmount The amount of stETH to be loaned
 * @param _stEthMarginAmount The amount of stETH margin
 * @param _stEthDepositAmount The amount of stETH to be deposited
 * @param _positionManagerPermit The permit for the position manager
 * @param _tradeData Trade data for executing trades
 * @return cdpId The ID of the newly opened CDP
 */
function openCdp(
    uint256 _debt,
    bytes32 _upperHint,
    bytes32 _lowerHint,
    uint256 _stEthLoanAmount,
    uint256 _stEthMarginAmount,
    uint256 _stEthDepositAmount,
    bytes calldata _positionManagerPermit,
    TradeData calldata _tradeData
) external nonReentrant onlyOwner returns (bytes32 cdpId) {
    // Function implementation
}

By implementing these steps, you can mitigate the key security risks identified in the EbtcLeverageZapRouter contract, thereby enhancing its overall security, robustness, and reliability.

Assessed type

Reentrancy

[c4-bot-8]

Withdrawn by sunnyboy95

[c4-bot-8]

Withdrawn by sunnyboy95