xiaoming90 - ETH can be sold during reinvestment

[sherlock-admin]

xiaoming90

medium

ETH can be sold during reinvestment

Summary

The existing control to prevent ETH from being sold during reinvestment can be bypassed, allowing the bots to accidentally or maliciously sell off the non-reward assets of the vault.

Vulnerability Detail

Multiple instances of this issue were found:

Instance 1 - Curve's Implementation

The _isInvalidRewardToken function attempts to prevent the callers from selling away ETH during reinvestment.

https://github.com/sherlock-audit/2023-10-notional/blob/main/leveraged-vaults/contracts/vaults/curve/ConvexStakingMixin.sol#L60

File: ConvexStakingMixin.sol
60:     function _isInvalidRewardToken(address token) internal override view returns (bool) {
61:         return (
62:             token == TOKEN_1 ||
63:             token == TOKEN_2 ||
64:             token == address(CURVE_POOL_TOKEN) ||
65:             token == address(CONVEX_REWARD_POOL) ||
66:             token == address(CONVEX_BOOSTER) ||
67:             token == Deployments.ALT_ETH_ADDRESS
68:         );
69:     }

However, the code at Line 67 above will not achieve the intended outcome as Deployments.ALT_ETH_ADDRESS is not a valid token address in the first place.

address internal constant ALT_ETH_ADDRESS = 0xEeeeeEeeeEeEeeEeEeEeeEEEeeeeEeeeeeeeEEeE;

When the caller is executing a trade with ETH, the address for ETH used is either Deployments.WETH or Deployments.ETH_ADDRESS (address(0)) as shown in the TradingUtils's source code, not the Deployments.ALT_ETH_ADDRESS.

https://github.com/sherlock-audit/2023-10-notional/blob/main/leveraged-vaults/contracts/trading/TradingUtils.sol#L128

File: TradingUtils.sol
128:     function _executeTrade(
129:         address target,
130:         uint256 msgValue,
131:         bytes memory params,
132:         address spender,
133:         Trade memory trade
134:     ) private {
135:         uint256 preTradeBalance;
136:  
137:         if (trade.buyToken == address(Deployments.WETH)) {
138:             preTradeBalance = address(this).balance;
139:         } else if (trade.buyToken == Deployments.ETH_ADDRESS || _needsToUnwrapExcessWETH(trade, spender)) {
140:             preTradeBalance = IERC20(address(Deployments.WETH)).balanceOf(address(this));
141:         }

As a result, the caller (bot) of the reinvestment function could still sell off the ETH from the vault, bypassing the requirement.

Instance 2 - Balancer's Implementation

When the caller is executing a trade with ETH, the address for ETH used is either Deployments.WETH or Deployments.ETH_ADDRESS (address(0)), as mentioned earlier. However, the AuraStakingMixin._isInvalidRewardToken function only blocks Deployments.WETH but not Deployments.ETH, thus allowing the caller (bot) of the reinvestment function, could still sell off the ETH from the vault, bypassing the requirement.

https://github.com/sherlock-audit/2023-10-notional/blob/main/leveraged-vaults/contracts/vaults/balancer/mixins/AuraStakingMixin.sol#L38

File: AuraStakingMixin.sol
38:     function _isInvalidRewardToken(address token) internal override view returns (bool) {
39:         return (
40:             token == TOKEN_1 ||
41:             token == TOKEN_2 ||
42:             token == TOKEN_3 ||
43:             token == TOKEN_4 ||
44:             token == TOKEN_5 ||
45:             token == address(AURA_BOOSTER) ||
46:             token == address(AURA_REWARD_POOL) ||
47:             token == address(Deployments.WETH)
48:         );
49:     }

Per the sponsor's clarification below, the contracts should protect against the bot doing unintended things (including acting maliciously) due to coding errors, which is one of the main reasons for having the _isInvalidRewardToken function. Thus, this issue is a valid bug in the context of this audit contest.

https://discord.com/channels/812037309376495636/1175450365395751023/1175781082336067655

Impact

The existing control to prevent ETH from being sold during reinvestment can be bypassed, allowing the bots to accidentally or maliciously sell off the non-reward assets of the vault.

Code Snippet

https://github.com/sherlock-audit/2023-10-notional/blob/main/leveraged-vaults/contracts/vaults/curve/ConvexStakingMixin.sol#L60

https://github.com/sherlock-audit/2023-10-notional/blob/main/leveraged-vaults/contracts/vaults/balancer/mixins/AuraStakingMixin.sol#L38

Tool used

Manual Review

Recommendation

To ensure that ETH cannot be sold off during reinvestment, consider the following changes:

Curve

File: ConvexStakingMixin.sol
function _isInvalidRewardToken(address token) internal override view returns (bool) {
    return (
        token == TOKEN_1 ||
        token == TOKEN_2 ||
        token == address(CURVE_POOL_TOKEN) ||
        token == address(CONVEX_REWARD_POOL) ||
        token == address(CONVEX_BOOSTER) ||
+       token == Deployments.ETH ||
+       token == Deployments.WETH ||
        token == Deployments.ALT_ETH_ADDRESS
    );
}

Balancer

File: AuraStakingMixin.sol
function _isInvalidRewardToken(address token) internal override view returns (bool) {
    return (
        token == TOKEN_1 ||
        token == TOKEN_2 ||
        token == TOKEN_3 ||
        token == TOKEN_4 ||
        token == TOKEN_5 ||
        token == address(AURA_BOOSTER) ||
        token == address(AURA_REWARD_POOL) ||
+		token == address(Deployments.ETH)        
        token == address(Deployments.WETH)
    );
}

[jeffywu]

Valid report.

[jeffywu]

notional-finance/leveraged-vaults#67

[MLON33]

notional-finance/leveraged-vaults#67

[xiaoming9090]

Fixed in PR 67