094.md

Mythical Burgundy Puppy

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[High] Logic Error in cdsAmountToReturn Function Causes Financial Miscalculations

Summary

A logic error in the cdsAmountToReturn function will cause inaccurate return amounts for CDS users as the function incorrectly calculates the Ethereum value to return, potentially leading to financial losses for users and destabilizing the protocol.

Root Cause

In CDS.sol:442-498, the cdsAmountToReturn function contains flawed logic in calculating the valDiff and subsequently the user's return amount. Specifically, the conditions handling the cumulative value signs and the subtraction of excessProfitCumulativeValue may lead to underflow or overestimation of returns.

Internal pre-conditions

1. The user has an active CDS position with a deposited amount.
2. The cumulativeValueSignAtDeposit matches the current cumulativeValueSign.
3. The cumulativeValueAtDeposit is either greater than or less than the cumulativeValueAtWithdraw, leading to different branches in the logic.

External pre-conditions

None. The issue can be exploited internally without relying on external protocols or conditions.

Attack Path

1. A CDS user initiates a withdrawal, triggering the cdsAmountToReturn function.
2. Due to incorrect handling of valDiff and excessProfitCumulativeValue, the function calculates an inaccurate return amount. Scenario A: If the cumulative value has decreased, the function may overstate the loss, resulting in users receiving less Ether than they are entitled to. Scenario B: If the cumulative value has increased, the function may understate the profit, causing users to receive less profit than they should.
3. Users are deprived of the correct amount of Ether, leading to financial loss and reduced trust in the protocol.

Impact

The cdsAmountToReturn function's flawed calculations can lead to significant financial discrepancies for CDS users. Users may receive less Ether than they are entitled to upon withdrawal, resulting in:

1. Financial Losses: Direct monetary losses for users.
2. Trust Erosion: Decreased confidence in the protocol's reliability and fairness.
3. Protocol Stability: Potential destabilization of the CDS pool due to miscalculations affecting overall balances.

PoC

// SPDX-License-Identifier: MIT
pragma solidity 0.8.22;

// Mock interface for CDS contract
interface ICDS {
    function cdsAmountToReturn(
        address _user,
        uint64 index,
        uint128 cumulativeValue,
        bool cumulativeValueSign,
        uint256 excessProfitCumulativeValue
    ) external view returns (uint256);
}

contract AttackCDS {
    ICDS public cds;

    constructor(address _cdsAddress) {
        cds = ICDS(_cdsAddress);
    }

    // Function to exploit the logic error by manipulating cumulative values
    function exploit(
        address user,
        uint64 index,
        uint128 manipulatedCumulativeValue,
        bool manipulatedCumulativeValueSign,
        uint256 manipulatedExcessProfit
    ) public view returns (uint256) {
        return cds.cdsAmountToReturn(user, index, manipulatedCumulativeValue, manipulatedCumulativeValueSign, manipulatedExcessProfit);
    }
}

Mitigation

Ensure Accurate valDiff Calculation:

Validate that valDiff accurately represents the difference between cumulativeValueAtDeposit and cumulativeValueAtWithdraw without causing underflows or overflows.

Proper Handling of excessProfitCumulativeValue:

Ensure that excessProfitCumulativeValue is subtracted or added correctly based on the sign of cumulativeValueSignAtDeposit and cumulativeValueSign.

Implement Comprehensive Unit Tests:

Create unit tests covering all possible scenarios of cumulativeValue and cumulativeValueSign to ensure accurate calculation