Dug - The price from StableOracleDAI is returned with the incorrect number of decimals

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Dug

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The price from StableOracleDAI is returned with the incorrect number of decimals

Summary

The price returned from the getPriceUSD function of the StableOracleDAI is scaled up by 1e10, which results in 28 decimals instead of the intended 18.

Vulnerability Detail

In StableOracleDAI the getPriceUSD function is defined as follows...

    function getPriceUSD() external view override returns (uint256) {
        address[] memory pools = new address[](1);
        pools[0] = 0x60594a405d53811d3BC4766596EFD80fd545A270;
        uint256 DAIWethPrice = DAIEthOracle.quoteSpecificPoolsWithTimePeriod(
            1000000000000000000, // 1 Eth
            0xC02aaA39b223FE8D0A0e5C4F27eAD9083C756Cc2, // WETH (base token)
            0x6B175474E89094C44Da98b954EedeAC495271d0F, // DAI (quote token)
            pools, // DAI/WETH pool uni v3
            600 // period
        );

        uint256 wethPriceUSD = ethOracle.getPriceUSD();

        // chainlink price data is 8 decimals for WETH/USD, so multiply by 10 decimals to get 18 decimal fractional
        //(uint80 roundID, int256 price, uint256 startedAt, uint256 timeStamp, uint80 answeredInRound) = priceFeedDAIETH.latestRoundData();
        (, int256 price,,,) = priceFeedDAIETH.latestRoundData();

        return (wethPriceUSD * 1e18) / ((DAIWethPrice + uint256(price) * 1e10) / 2);
    }

The assumption is made that the DAIWethPrice is 8 decimals, and is therefore multiplied by 1e10 in the return statement to scale it up to 18 decimals.

The other price feeds used in the protocol are indeed received with decimals, however, the Chainlink DAI/ETH price feed returns a value with 18 decimals as can be seen on their site.

https://docs.chain.link/data-feeds/price-feeds/addresses

Impact

This means that the price returned from the getPriceUSD function is scaled up by 1e10, which results in 28 decimals instead of the intended 18, drastically overvaluing the DAI/USD price.

This will result in the USSD token price being a tiny fraction of what it is intended to be. Instead of being pegged to $1, it will be pegged to $0.0000000001, completely defeating the purpose of the protocol.

For example, if a user calls USSD.mintForToken, supplying DAI, they'll be able to mint 1e10 times more USSD than intended.

Code Snippet

https://github.com/sherlock-audit/2023-05-USSD/blob/main/ussd-contracts/contracts/oracles/StableOracleDAI.sol#L33-L53

Tool used

Manual Review

Recommendation

Remove the * 1e10 from the return statement.

-   return (wethPriceUSD * 1e18) / ((DAIWethPrice + uint256(price) * 1e10) / 2);
+   return (wethPriceUSD * 1e18) / (DAIWethPrice + uint256(price) / 2);