Potential for Price Manipulation in Using slot0 to Obtain sqrtPriceX96
Summary
This report details a vulnerability in decentralized exchange protocols that rely on liquidity pools, specifically focusing on the manipulation of the sqrtPriceX96 value obtained from the slot0 function. This vulnerability can be exploited through Miner Extractable Value (MEV) strategies, flash loans, and sandwich attacks, potentially leading to significant financial losses for users interacting with affected functions.
Vulnerability Detail
The core of the vulnerability lies in the reliance on the slot0 function, which provides the most recent data point for several key state variables, including sqrtPriceX96. This data point can be manipulated by attackers using various techniques:
MEV Strategies: Miners or validators can reorder, insert, or censor transactions to manipulate the slot0 data to their advantage.
Flash Loans: Attackers can borrow large amounts of tokens temporarily, manipulate the pool’s state, and repay the loan within the same transaction.
Sandwich Attacks: Attackers place large buy/sell orders around a target transaction to exploit price slippage and manipulate the slot0 data.
Impact
currentTick() Function: While this function retrieves the current tick, it can be indirectly affected by manipulations in slot0.
price() Function: This function’s accuracy depends on sqrtPriceX96. Manipulated sqrtPriceX96 leads to incorrect price calculations, potentially causing significant financial losses.
sqrtPrice() Function: Directly retrieves the manipulated sqrtPriceX96, leading to inaccuracies.
Sparrow_Jac
high
Potential for Price Manipulation in Using
slot0to ObtainsqrtPriceX96Summary
This report details a vulnerability in decentralized exchange protocols that rely on liquidity pools, specifically focusing on the manipulation of the
sqrtPriceX96value obtained from theslot0function. This vulnerability can be exploited through Miner Extractable Value (MEV) strategies, flash loans, and sandwich attacks, potentially leading to significant financial losses for users interacting with affected functions.Vulnerability Detail
The core of the vulnerability lies in the reliance on the
slot0function, which provides the most recent data point for several key state variables, includingsqrtPriceX96. This data point can be manipulated by attackers using various techniques:slot0data to their advantage.slot0data.Impact
currentTick()Function: While this function retrieves the current tick, it can be indirectly affected by manipulations inslot0.price()Function: This function’s accuracy depends onsqrtPriceX96. ManipulatedsqrtPriceX96leads to incorrect price calculations, potentially causing significant financial losses.sqrtPrice()Function: Directly retrieves the manipulatedsqrtPriceX96, leading to inaccuracies.Code Snippet
Tool used
Manual Review
Recommendation
Integrate TWAP in Critical Functions: Modify functions that depend on price data, such as
price(), to use TWAP instead of the latest priceDuplicate of #10