Single-step process for critical ownership transfer/renounce is risky

[code423n4]

Lines of code

https://github.com/code-423n4/2022-08-rigor/blob/e35f5f61be9ff4b8dc5153e313419ac42964d1fd/contracts/HomeFiProxy.sol#L100-L115
https://github.com/code-423n4/2022-08-rigor/blob/e35f5f61be9ff4b8dc5153e313419ac42964d1fd/contracts/HomeFiProxy.sol#L125-L139
https://github.com/code-423n4/2022-08-rigor/blob/e35f5f61be9ff4b8dc5153e313419ac42964d1fd/contracts/HomeFiProxy.sol#L150-L157
https://github.com/code-423n4/2022-08-rigor/blob/f2498c86dbd0e265f82ec76d9ec576442e896a87/contracts/HomeFi.sol#L157-L168

Vulnerability details

Single-step process for critical ownership transfer/renounce is risky

Impact

The following functions of HomeFiProxy.sol, allow owners to interact with critical functions for adding new contracts and upgrade implementations, also to change the proxy owner:
addNewContract, upgradeMultipleImplementations and changeProxyAdminOwner

Given that HomeFiProxy.sol is derived from Ownable, the ownership management of this contract defaults to Ownable ’s transferOwnership() and renounceOwnership() methods which are not overridden here.

Same issue of transferring the ownership can be applied to the proxyAdmin.transferOwnership(_newAdmin) in one step.

Such critical address transfer/renouncing in one-step is very risky because it is irrecoverable from any mistakes

Scenario: If an incorrect address, e.g. for which the private key is not known, is used accidentally then it prevents the use of all the onlyOwner() functions forever, which includes the changing of various critical addresses and parameters. This use of incorrect address may not even be immediately apparent given that these functions are probably not used immediately.

When noticed, due to a failing onlyOwner() or onlyOwnerOrAssetManager() function call, it will force the redeployment of these contracts and require appropriate changes and notifications for switching from the old to new address. This will diminish trust in the protocol and incur a significant reputational damage.

Github Permalinks

https://github.com/code-423n4/2022-08-rigor/blob/e35f5f61be9ff4b8dc5153e313419ac42964d1fd/contracts/HomeFiProxy.sol#L100-L115
https://github.com/code-423n4/2022-08-rigor/blob/e35f5f61be9ff4b8dc5153e313419ac42964d1fd/contracts/HomeFiProxy.sol#L125-L139
https://github.com/code-423n4/2022-08-rigor/blob/e35f5f61be9ff4b8dc5153e313419ac42964d1fd/contracts/HomeFiProxy.sol#L150-L157

Other instances of this issue
https://github.com/code-423n4/2022-08-rigor/blob/f2498c86dbd0e265f82ec76d9ec576442e896a87/contracts/HomeFi.sol#L157-L168

Proof of concept

See similar High Risk severity finding from Trail-of-Bits Audit of Hermez.
https://github.com/trailofbits/publications/blob/master/reviews/hermez.pdf
See similar Medium Risk severity finding from Trail-of-Bits Audit of Uniswap V3:
https://github.com/Uniswap/v3-core/blob/main/audits/tob/audit.pdf

Recommended steps

Recommend overriding the inherited methods to null functions and use separate functions for a two-step address change:

1. Approve a new address as a pendingOwner
2. A transaction from the pendingOwner address claims the pending ownership change.

This mitigates risk because if an incorrect address is used in step (1) then it can be fixed by re-approving the correct address. Only after a correct address is used in step (1) can step (2) happen and complete the address/ownership change.

Also, consider adding a time-delay for such sensitive actions. And at a minimum, use a multisig owner address and not an EOA.