Rebalancing : `updateWeights` could revert to due to strict check for swap. This would impact the timely rebalancing.

[hats-bug-reporter[bot]]

Github username: @aktech297 Twitter username: kaka Submission hash (on-chain): 0xd114959c5e80ef86a2e0524d93f295ab15058232187ff60e4e9e1d37e37c0daf Severity: high

Description: Description\

The function updateWeights in the Rebalancing contract is called by the assetmanager to update the weights.

During the process,

1. Funds pulled form the vault to the swap handler for sell token .
2. doing swap using the EnsoHandler contract.
3. checking whether any leftover token in the hanlder contract. if so revert the update weight call.
4. verify the token balance in the vault.

In the above process, the step 4 is too strict. Practically it is not possible to swap all the token amounts. some dust will be left over.

There are array of tokens involved for swap and update.

It is possible that for anyone token, all the amount may not be used for swap. so the swap handler would left our with dust amount. So, the check done in step 3 would cause the revert of the operation.

The other case which might be concerning is,

The swap hanlder already funded a small amount by somebody else just before calling the updateWeights

if we look at the calldata for swap, it would contain the input and output token address, input and output token amount and slippage parameters.

As said above, if the hanlder is funded with dust amount already, then it will have more than the input amount wihch is encoded in the calldata.

So, swap halder certainly will left out with some funds after swap.

This will cause continous DOS when updating the weights.

Impact\

Hardly few times, the token swap done fully. most of the time some dust will remain in handler. this will cause unexpected revert during the update weights process.

Update weights would be DOSed by donating small amount to the swap handler.

Attachments

1. Proof of Concept (PoC) File

Code where the revert would happen

2. Revised Code File (Optional)

We would suggest follwing changes.

1. instead of pulling funds to handler, pull the funds to the EnsoHandler contract where swap is called.
2. Approve the swap hanlder in the EnsoHandler contract to spent the token amount.
3. if any leftover remain in the EnsoHandler, transfer it to the vault.

[aktech297]

correction -the step 4 is too strict --> the step 3 is too strict

in the recommendation, step 1 is already there.