Any smart contract (including multisigs) that has a fallbackback function and EUSD share balance can be forced to burn their tokens

[code423n4]

Lines of code

https://github.com/code-423n4/2023-06-lybra/blob/main/contracts/lybra/token/PeUSDMainnetStableVision.sol#L132

Vulnerability details

Impact

• There is a flashloan functionality where anyone can flashborrow EUSD shares in exchange for a fee. The FlashBorrower is assumed to have an onFlashLoan function that properly checks whether they intended to flashborrow or not.
• An attacker targets a victim that meets the following three conditions:
  • Has an EUSD share balance
  • Is a smart contract (possibly be a multisig) with a fallback function
  • Has approved EUSD to PeUSDMainnet contract
    • Very likely, as there are other actions that require them to do so. For example, convertToPeUSD
• An attacker can pass a victim address that matches the above criteria as FlashBorrower and call the executeFlashloan function. In this case, receiver.onFlashLoan(shareAmount, data); results in a no-op. The contract incorrectly assumes that the receiver intended to borrow the funds and proceeds to burnShares of the victim contract.

Proof of Concept

• https://github.com/code-423n4/2023-06-lybra/blob/main/contracts/lybra/token/PeUSDMainnetStableVision.sol#L129
• https://github.com/code-423n4/2023-06-lybra/blob/main/contracts/lybra/token/PeUSDMainnetStableVision.sol#L137
• https://github.com/code-423n4/2023-06-lybra/blob/main/contracts/lybra/token/PeUSDMainnetStableVision.sol#L132

Tools Used

• Manual Review

Recommended Mitigation Steps

• Use ERC3156 flashloan standard

Assessed type

Access Control

[c4-pre-sort]

JeffCX marked the issue as duplicate of #280

[c4-judge]

0xean marked the issue as satisfactory

[c4-judge]

0xean changed the severity to 3 (High Risk)