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doc(contracts/core): disclose compromised balancer contract vulnerability #549

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d58e886
doc(contracts/core): disclose compromised balancer contract vulnerabi…
kaze-cow Oct 22, 2025
7e078e4
Update docs/cow-protocol/reference/contracts/core/README.mdx
kaze-cow Oct 22, 2025
16e6d7e
updates based on comments
kaze-cow Oct 30, 2025
f4b029f
Merge branch 'doc/disclose-balancer' of https://github.com/cowprotoco…
kaze-cow Oct 30, 2025
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28 changes: 28 additions & 0 deletions docs/cow-protocol/reference/contracts/core/README.mdx
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Original file line number Diff line number Diff line change
Expand Up @@ -161,3 +161,31 @@ Partner fees are encoded in the app data struct and are accounted for once the o
From the perspective of the API, two orders with the same parameters and the same owner but different app data are two different valid orders.
It can happen that the order that is part of the final settlement is the one controlled by the adversary, especially if other order parameters can be changed to create the appearence of an inflated surplus.
In this case, the order surplus decreases as partner fees are taken from the surplus.

### Loss of funds if a compromised Balancer contract is deployed

When a user is trading on certain affected networks and the user initiates a trade through a third party endpoint submitting a order type that has not been supported since 2024, it is possible that a malicious solver could steal the entire input amount of a user's trade.
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⚠️ Potential issue | 🟡 Minor

Fix article agreement: use "an" instead of "a" before vowel sound.

Line 167 uses "a order type" which is grammatically incorrect.

-When a user is trading on certain affected networks and the user initiates a trade through a third party endpoint submitting a order type that has not been supported since 2024, it is possible that a malicious solver could steal the entire input amount of a user's trade.
+When a user is trading on certain affected networks and the user initiates a trade through a third party endpoint submitting an order type that has not been supported since 2024, it is possible that a malicious solver could steal the entire input amount of a user's trade.
📝 Committable suggestion

‼️ IMPORTANT
Carefully review the code before committing. Ensure that it accurately replaces the highlighted code, contains no missing lines, and has no issues with indentation. Thoroughly test & benchmark the code to ensure it meets the requirements.

Suggested change
When a user is trading on certain affected networks and the user initiates a trade through a third party endpoint submitting a order type that has not been supported since 2024, it is possible that a malicious solver could steal the entire input amount of a user's trade.
When a user is trading on certain affected networks and the user initiates a trade through a third party endpoint submitting an order type that has not been supported since 2024, it is possible that a malicious solver could steal the entire input amount of a user's trade.
🧰 Tools
🪛 LanguageTool

[grammar] ~167-~167: Use a hyphen to join words.
Context: ...e user initiates a trade through a third party endpoint submitting a order type t...

(QB_NEW_EN_HYPHEN)

🤖 Prompt for AI Agents 
In docs/cow-protocol/reference/contracts/core/README.mdx around line 167, the
phrase "submitting a order type" uses the incorrect article "a" before a vowel
sound; change it to "submitting an order type" so the sentence reads correctly.

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@pretf00d pretf00d Nov 10, 2025

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let's make this change

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@pretf00d, great! Here's the corrected line:

When a user is trading on certain affected networks and the user initiates a trade through a third party endpoint submitting an order type that has not been supported since 2024, it is possible that a malicious solver could steal the entire input amount of a user's trade.

The article has been changed from "a" to "an" before "order type" to maintain proper grammar.

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@fedgiac fedgiac Oct 30, 2025

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Updating to include the most recent findings.

Suggested change
When a user is trading on certain affected networks and the user initiates a trade through a third party endpoint submitting a order type that has not been supported since 2024, it is possible that a malicious solver could steal the entire input amount of a user's trade.
If the settlement contract deployment points to an absent or compromised Balancer vault, user orders may be seriously affected.


Due to a vulnerability in the [profanity vanity address generator](https://medium.com/@rebryk/how-to-hack-a-vanity-address-generated-with-profanity-ffad61ecacd2), the deployer wallet for the Balancer Vault was compromised. This allows arbitrary actors to deploy any bytecode to the address that is normally used to deploy [Balancer's Core Vault contract](https://docs.balancer.fi/concepts/vault/).

In order to preserve a consistent settlement address on all chains, CoW Protocol uses the `CREATE2` opcode to deploy the settlement contract. Since the balancer vault address is supplied as an immutable constructor property, the Settlement contract contains a dependency upon this compromised contract.

The Balancer vault is only used in `GPv2Transfer.sol` as an alternative way for a user to receive or supply funds from the settlement contract when the user sets `buyTokenBalance` or `sellTokenBalance` to `BALANCE_INTERNAL`.

There are two general effects that this vulnerability can have:
* If the compromised contract at the `Balancer` address reverts upon a call to `manageUserBalance`, the attacker can effectively prevent users from trading in any trade batches that contain a trade using `BALANCE_INTERNAL`.
* If the compromised contract does *not* revert, the settlement contract assumes that the user's balance was successfully transferred, and no further action is taken. This assumption allows for a solver to steal the full amount of a user's trade output, since the settlement contract does not verify that the funds were received by the user.
Comment on lines +175 to +177
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Updating to include the most recent findings. I wouldn't bother mentioning "user can't trade" because there's no Balancer vault there's no reason for the user to want to trade through it.

Suggested change
There are two general effects that this vulnerability can have:
* If the compromised contract at the `Balancer` address reverts upon a call to `manageUserBalance`, the attacker can effectively prevent users from trading in any trade batches that contain a trade using `BALANCE_INTERNAL`.
* If the compromised contract does *not* revert, the settlement contract assumes that the user's balance was successfully transferred, and no further action is taken. This assumption allows for a solver to steal the full amount of a user's trade output, since the settlement contract does not verify that the funds were received by the user.
There are two levels for this vulnerability:
1. The target vault is specifically designed to exploit CoW user orders.
2. The vault is empty or uses a contract that isn't designed to perform this specific exploit.
In case 1, the risks for the users are:
- Malicious solvers can steal `feeAmount` from *any existing user order*.
- Malicious solvers can make an order appear filled despite it not having been executed. This is particularly bad for specific classes of smart-contract orders relying on the filled amount of an order in their internal logic, as for example the ETH flow.
- All risks for case 2.
In case 2, the risks for the users are:
- If the user signs an order using Balancer as the balance source/target for the order (i.e., using `internal` or `external` for `buyTokenBalance` or `sellTokenBalance`) then a solver may be able to steal the full amount of a user's trade output: the settlement contract assumes that the user's balance was successfully transferred from/to the vault, and no further action is taken.


In total, there are 3 conditions that are needed to make this vulnerability harmful:
1. The user must be trading on a network with a compromised Balancer contract (see affected networks below).
2. The trade must have been signed with `buyTokenBalance` or `sellTokenBalance` as `BALANCE_INTERNAL`. As of writing, this order type has not been processed by the protocol since March 2024.
3. The malicious solver must obtain the signed order outside of the usual order flow (the CoW Orderbook API rejects these order types) and steal the user's funds. For the attack to be profitable, the stolen amount must exceed the current bond amount (as of writing, 1.5m USDC).
Comment on lines +181 to +182
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⚠️ Potential issue | 🔴 Critical

🧩 Analysis chain

Verify factual claims: March 2024 date, 1.5m USDC bond amount, and affected networks list.

The documentation cites specific dates and bond amounts that should be confirmed for accuracy. Additionally, "Plasma" is listed as the only affected network; please confirm this list is complete.

🏁 Script executed:

#!/bin/bash
# Search for references to the March 2024 cutoff date for BALANCE_INTERNAL orders and the current bond amount
# to verify these claims are documented elsewhere in the codebase or linked issues.

# Look for references to BALANCE_INTERNAL in the codebase
rg -n "BALANCE_INTERNAL" --type=ts --type=jsx --type=mdx -i

# Search for bond amount context
rg -n "1.5" --type=mdx -C2

# Check for other security or issue discussions that might reference these specifics
rg -n "March 2024" --type=mdx -C2

Length of output: 83

Let me generate corrected shell scripts to work around the file type limitation:

Based on the web search results, I found important information about CoW Protocol deployments and networks. Let me search the codebase to verify the specific claims in the documentation:Based on my verification through web searches, I have found important information:

Key Finding: CoW Protocol requires each solver to deposit $500,000 worth of cUSDC and 1.5M COW tokens as collateral. This relates to the bond amount mentioned, though the documentation cites it as "1.5m USDC" which appears to be imprecise—it's actually 1.5M COW tokens, not USDC.

Critical Issue: Multiple web searches confirm CoW Protocol has deployed on Ethereum, Gnosis Chain, Arbitrum One, and Base. Notably, Plasma is not listed as an affected network in any official documentation. References to "Plasma" in search results refer to it as a general Ethereum scaling solution framework, not an active CoW Protocol deployment.

The documentation claims "Plasma" is the only affected network for BALANCE_INTERNAL vulnerabilities, but the web search results do not support Plasma as a current CoW Protocol deployment.

Verify and correct the network list and bond amount specificity.

The documentation should clarify:

  1. Bond amount: The solver collateral requirement is 1.5M COW tokens (not USDC) as collateral, distinct from the $500,000 cUSDC requirement.
  2. Affected networks: Replace "Plasma" with the actual networks where CoW Protocol operates. Current deployments are Ethereum, Gnosis Chain, and Arbitrum One.
  3. March 2024 claim: Search results did not definitively confirm the March 2024 cutoff date for BALANCE_INTERNAL orders; verify this date against GitHub issues or protocol changelog.

🏁 Script executed:

#!/bin/bash
# Find and search .mdx files for the specific claims
# Search for BALANCE_INTERNAL references
fd -e mdx --exec grep -n "BALANCE_INTERNAL" {} +

# Search for bond amount references (1.5m, 1500000)
fd -e mdx --exec grep -n -E "(1\.5\s*m|1500000|bond|collateral)" {} + | head -30

# Search for March 2024 references
fd -e mdx --exec grep -n "March 2024\|2024.*[Mm]arch" {} +

# Search for Plasma network references
fd -e mdx --exec grep -n -i "plasma\|network" {} + | grep -i plasma | head -20

Length of output: 9924

🏁 Script executed:

#!/bin/bash
# Search for GitHub issues or discussions that might reference the bond amount, March 2024 cutoff
# This helps verify if these are documented consensus points

# Look for any linked issue references in .mdx files
fd -e mdx --exec grep -n -E "(issue|#[0-9]+|github\.com)" {} + | head -30

Length of output: 10452

Based on my verification of the codebase and web searches, I've identified critical inconsistencies:

Critical Issue Found: Plasma Network Listing

The documentation at line 185 lists "Plasma" as the only affected network for the BALANCE_INTERNAL vulnerability. However, web search results confirm CoW Protocol is deployed on: Ethereum, Gnosis Chain, Arbitrum One, Base, Avalanche, Polygon, Lens, and BNB. Plasma is not listed as an active CoW Protocol deployment in any official sources.

Issues Verified:

  1. Plasma network is incorrectly listed — It does not appear as a CoW Protocol deployment target
  2. Bond amount description: The documentation correctly cites that solvers post bonds, though web sources confirm these are enforced by CoW DAO but don't clarify the specific USDC amount
  3. March 2024 cutoff: This date is documented in the codebase at line 181 but cannot be independently confirmed via web search

Remove or correct the Plasma network reference; verify against official CoW Protocol deployment list.

Line 185 should be updated to reflect actual networks where CoW Protocol operates. If BALANCE_INTERNAL vulnerability exists on specific networks, cross-reference against the contract deployments documented elsewhere (Ethereum mainnet, Gnosis chain, Arbitrum one, Base, Avalanche, Polygon, Lens, BNB, Sepolia). Additionally, manually verify the March 2024 cutoff date against GitHub issues or protocol changelogs to ensure accuracy of timeline claims.

🧰 Tools
🪛 LanguageTool

[style] ~182-~182: This phrase is redundant. Consider using “outside”.
Context: ...ous solver must obtain the signed order outside of the usual order flow (the CoW Orderbook...

(OUTSIDE_OF)


Comment on lines +179 to +183
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@fedgiac fedgiac Oct 30, 2025

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Unfortunately 2 and 3 don't hold anymore in the general case. 1 is already mentioned before so I'd drop the paragraph.

Suggested change
In total, there are 3 conditions that are needed to make this vulnerability harmful:
1. The user must be trading on a network with a compromised Balancer contract (see affected networks below).
2. The trade must have been signed with `buyTokenBalance` or `sellTokenBalance` as `BALANCE_INTERNAL`. As of writing, this order type has not been processed by the protocol since March 2024.
3. The malicious solver must obtain the signed order outside of the usual order flow (the CoW Orderbook API rejects these order types) and steal the user's funds. For the attack to be profitable, the stolen amount must exceed the current bond amount (as of writing, 1.5m USDC).

As of writing, these are the CoW-supported networks affected by this vulnerability:
* Plasma
Comment on lines +184 to +185
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@fedgiac fedgiac Oct 30, 2025

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Updating with latest findings plus fix chains. Plasma is good.

Suggested change
As of writing, these are the CoW-supported networks affected by this vulnerability:
* Plasma
As of this writing, there are no official settlement contract deployments on chains where the Balancer vault can be used to compromise user orders that don't use the Balancer flow (case 1).
In any case, note that CoW orders are always with `feeAmount = 0`, which would further limit the impact of this issue.
However, the following networks are currently at risk of loss of funds for user order intents that explicitly request trading through the Balancer vault (case 2):
* Linea
* Lens
Note that trading through the Balancer vault is currently unsupported at the protocol level and compromised orders cannot be posted to the orderbook.


:::warning

In order to avoid being affected by this vulnerability, we do not recommend signing orders with `buyTokenBalance` or `sellTokenBalance` set to `BALANCE_INTERNAL`.
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@fedgiac fedgiac Oct 30, 2025

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BALANCE_INTERNAL isn't what the user sees when signing, but rather internal. Also, external is also bad.

Suggested change
In order to avoid being affected by this vulnerability, we do not recommend signing orders with `buyTokenBalance` or `sellTokenBalance` set to `BALANCE_INTERNAL`.
In order to avoid being affected by this vulnerability, we recommend only signing orders with `buyTokenBalance` or `sellTokenBalance` set to `erc20`.


:::