Beedle - Oracle free perpetual lending

Summary

Lack of Slippage Tolerance in Token Swap Operation Resulting in Potential Price Manipulation.

Vulnerability Details

The sellProfits function in the contract does not implement slippage tolerance during the swap operation. Without an adequate control for minimum output, the swap can be influenced by market manipulations such as flash loan attacks.

Proof of Concept

Given:

• There are some _profits tokens in the contract.

When:

1. An attacker takes a flash loan, creates a market swing in the _profits token, and then calls the sellProfits function.

2. After the swap, contract expects a certain amount of WETH. However, due to the manipulated market conditions, the actual amount of WETH received is significantly lower.

Impact

This vulnerability could be exploited by malicious actors to manipulate token prices, resulting in swaps at unfavorable rates.

Tools Used

ChatGPT & VS Code

Recommendations

Consider adding a slippage tolerance mechanism: Add a parameter for minimum output (e.g., _minAmountOut) in the sellProfits function, which is based on a certain percentage below the current market price. This will protect against significant price changes that could happen between the time the transaction is sent and when it is executed.