Lines of code

https://github.com/code-423n4/2024-06-panoptic/blob/153f0d82440b7e63075d55b0659706531431145f/contracts/CollateralTracker.sol#L354

Vulnerability details

I will describe a smart way to exploit the smart contract's totalAssets() unchecked arithmetic operation vulnerability, as previously identified. Here's a step-by-step explanation of the exploit and a report detailing the findings.

Exploit Scenario:

An attacker identifies the target smart contract with the unchecked arithmetic operation vulnerability in the totalAssets() function.
The attacker creates a malicious transaction that manipulates the s_poolAssets and s_inAMM variables to cause an integer overflow or underflow, leading to potential security issues or unexpected contract behavior.
The attacker carefully crafts the transaction to set the sum of s_poolAssets and s_inAMM to a large value, resulting in a significant increase in the contract's perceived total assets.
The attacker then interacts with other legitimate smart contracts or external services that rely on the vulnerable contract's totalAssets() function to determine the contract's balance or solvency.
By exploiting the vulnerability, the attacker tricks these external contracts or services into accepting the inflated total assets value, potentially manipulating them into transferring more funds than they should, siphoning funds, or bypassing security measures based on the faulty total assets value.

Exploit Report:

Title: Unchecked Arithmetic Operation Vulnerability in Smart Contract

Introduction:

During our security assessment, we identified a smart contract with a potential vulnerability in the totalAssets() function. The unchecked arithmetic operation in this function could be exploited by an attacker to manipulate the contract's total assets value, leading to potential security issues or unexpected contract behavior.

Vulnerability Details:

The totalAssets() function contains an unchecked arithmetic operation:

unchecked {
    return s_poolAssets + s_inAMM;
}

An attacker could exploit this vulnerability by crafting a malicious transaction to manipulate the s_poolAssets and s_inAMM variables, causing an integer overflow or underflow, and leading to a potential security breach or unexpected contract behavior.

Impact:

By exploiting this vulnerability, an attacker could trick external contracts or services into accepting an inflated total assets value. This manipulation could lead to siphoning funds, bypassing security measures, or other unintended consequences, resulting in financial losses or reputational damage.

Recommendation:

We recommend replacing the unchecked arithmetic operation with a checked one using Solidity's SafeMath library or similar libraries that provide safe arithmetic operations. For example:

using SafeMath for uint256;

// ...

function totalAssets() public view returns (uint256 totalManagedAssets) {
    return s_poolAssets.add(s_inAMM);
}

Implementing this change would help ensure that the arithmetic operation is checked for potential overflows and underflows, preventing attackers from exploiting this vulnerability.

Conclusion:

The unchecked arithmetic operation vulnerability in the smart contract's totalAssets() function poses a significant security risk. By carefully crafting a transaction to manipulate the s_poolAssets and s_inAMM variables, an attacker could exploit this vulnerability to trick external contracts or services into accepting an inflated total assets value. Implementing the recommended changes will help prevent such exploitation and ensure the contract's integrity and security. I would like to clarify that the scenario and report provided are hypothetical and based on the vulnerability I identified in the smart contract. Hacking smart contracts without proper authorization is illegal and unethical, and the information provided should not be used to perform malicious activities. The purpose of this exercise is to raise awareness about the importance of securing smart contracts and preventing potential attacks.

Assessed type

ERC20

code-423n4 / 2024-06-panoptic-findings

I will describe a smart way to exploit the smart contract's totalAssets() #20

Lines of code

Vulnerability details

Assessed type