No lender is able to exit even after the market is closed

[howlbot-integration[bot]]

Lines of code

https://github.com/code-423n4/2024-08-wildcat/blob/main/src/access/FixedTermLoanHooks.sol#L848-L868 https://github.com/code-423n4/2024-08-wildcat/blob/main/src/access/FixedTermLoanHooks.sol#L943-L946

Vulnerability details

Impact

Lenders might not be able to exit even after the market is closed

Proof of Concept

When a borrower creates a market hooked by a fixed-term hook, all lenders are prohibited from withdrawing their assets from the market before the fixed-term time has elapsed. The borrower can close the market at any time. However, fixedTermEndTime of the market is not updated, preventing lenders from withdrawing their assets if fixedTermEndTime has not yet elapsed.

Copy below codes to WildcatMarket.t.sol and run forge test --match-test test_closeMarket_BeforeFixedTermExpired:

  function test_closeMarket_BeforeFixedTermExpired() external {
    //@audit-info deploy a FixedTermLoanHooks template
    address fixedTermHookTemplate = LibStoredInitCode.deployInitCode(type(FixedTermLoanHooks).creationCode);
    hooksFactory.addHooksTemplate(
      fixedTermHookTemplate,
      'FixedTermLoanHooks',
      address(0),
      address(0),
      0,
      0
    );

    vm.startPrank(borrower);
    //@audit-info borrower deploy a FixedTermLoanHooks hookInstance
    address hooksInstance = hooksFactory.deployHooksInstance(fixedTermHookTemplate, '');
    DeployMarketInputs memory parameters = DeployMarketInputs({
      asset: address(asset),
      namePrefix: 'name',
      symbolPrefix: 'symbol',
      maxTotalSupply: type(uint128).max,
      annualInterestBips: 1000,
      delinquencyFeeBips: 1000,
      withdrawalBatchDuration: 10000,
      reserveRatioBips: 10000,
      delinquencyGracePeriod: 10000,
      hooks: EmptyHooksConfig.setHooksAddress(address(hooksInstance))
    });
    //@audit-info borrower deploy a market hooked by a FixedTermLoanHooks hookInstance
    address market = hooksFactory.deployMarket(
      parameters,
      abi.encode(block.timestamp + (365 days)),
      bytes32(uint(1)),
      address(0),
      0
    );
    vm.stopPrank();
    //@audit-info lenders can only withdraw their asset one year later
    assertEq(FixedTermLoanHooks(hooksInstance).getHookedMarket(market).fixedTermEndTime, block.timestamp + (365 days));
    //@audit-info alice deposit 50K asset into market
    vm.startPrank(alice);
    asset.approve(market, type(uint).max);
    WildcatMarket(market).depositUpTo(50_000e18);
    vm.stopPrank();
    //@audit-info borrower close market in advance
    vm.prank(borrower);
    WildcatMarket(market).closeMarket();
    //@audit-info the market is closed
    assertTrue(WildcatMarket(market).isClosed());
    //@audit-info however, alice can not withdraw her asset due to the unexpired fixed term.
    vm.expectRevert(FixedTermLoanHooks.WithdrawBeforeTermEnd.selector);
    vm.prank(alice);
    WildcatMarket(market).queueFullWithdrawal();
  }

Tools Used

Manual review

Recommended Mitigation Steps

When a market hooked by a fixed-term hook is closed, fixedTermEndTime should be set to block.timestamp if it has not yet elapsed:

  constructor(address _deployer, bytes memory /* args */) IHooks() {
    borrower = _deployer;
    // Allow deployer to grant roles with no expiry
    _roleProviders[_deployer] = encodeRoleProvider(
      type(uint32).max,
      _deployer,
      NotPullProviderIndex
    );
    HooksConfig optionalFlags = encodeHooksConfig({
      hooksAddress: address(0),
      useOnDeposit: true,
      useOnQueueWithdrawal: false,
      useOnExecuteWithdrawal: false,
      useOnTransfer: true,
      useOnBorrow: false,
      useOnRepay: false,
      useOnCloseMarket: false,
      useOnNukeFromOrbit: false,
      useOnSetMaxTotalSupply: false,
      useOnSetAnnualInterestAndReserveRatioBips: false,
      useOnSetProtocolFeeBips: false
    });
    HooksConfig requiredFlags = EmptyHooksConfig
      .setFlag(Bit_Enabled_SetAnnualInterestAndReserveRatioBips)
+     .setFlag(Bit_Enabled_CloseMarket);
      .setFlag(Bit_Enabled_QueueWithdrawal);
    config = encodeHooksDeploymentConfig(optionalFlags, requiredFlags);
  }

  function onCloseMarket(
    MarketState calldata /* state */,
    bytes calldata /* hooksData */
- ) external override {}
+ ) external override {
+   HookedMarket memory market = _hookedMarkets[msg.sender];
+   if (!market.isHooked) revert NotHookedMarket();
+   if (market.fixedTermEndTime > block.timestamp) {
+     _hookedMarkets[msg.sender].fixedTermEndTime = uint32(block.timestamp);
+   }
+ }

Assessed type

Timing

[laurenceday]

This is a great catch. No further comments!

[c4-judge]

3docSec marked the issue as selected for report

[c4-judge]

3docSec marked the issue as satisfactory

[laurenceday]

Fixed by https://github.com/wildcat-finance/v2-protocol/commit/05958e35995093bcf6941c82fc14f9b9acc7cea0