CodeHawks Escrow Contract - Competition Details
Cyfrin
Foundry
40,000 USDC
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Submission Details
Severity: medium

Concern Regarding Lack of Cap on `buyerAward` in `Escrow.sol`

serverconnected

Summary

In the resolveDispute function of Escrow.sol, I noticed that there isn't a cap on the buyerAward parameter, which can potentially lead to an unfair scenario where the buyer and arbiter could collaborate to secure the majority of the locked funds. This situation could adversely impact the seller, resulting in significant losses for the seller upon completion of the work.

Vulnerability Details

For example, consider a case where the total locked price is 10 DAI tokens, and the arbiter fee is 2 DAI tokens. By setting the buyerAward to a value less than 8 DAI tokens (e.g., 7 DAI tokens), the buyer and arbiter can together receive the majority of the locked funds, leaving only 1 DAI token for the seller.

Impact

// @audit-issue if buyer and arbiter work together then can get majority of the locked funds
// @audit-issue ex: locked funds 10
// @audit-issue ex: arbiter fee: 5 (valid since arbiter fee is < locked price)
// @audit-issue ex: arbiter can set buyAward as 4 (valid since buyAward + arbiter fee < locked price)
// @audit-issue ex: seller will get less funds
// @audit-info there needs to be a cap on arbiter fee and buyAward
/// @inheritdoc IEscrow
function resolveDispute(uint256 buyerAward) external onlyArbiter nonReentrant inState(State.Disputed) {
uint256 tokenBalance = i_tokenContract.balanceOf(address(this));
uint256 totalFee = buyerAward + i_arbiterFee; // Reverts on overflow
if (totalFee > tokenBalance) {
revert Escrow__TotalFeeExceedsBalance(tokenBalance, totalFee);
}
​
s_state = State.Resolved;
emit Resolved(i_buyer, i_seller);
​
if (buyerAward > 0) {
i_tokenContract.safeTransfer(i_buyer, buyerAward);
}
if (i_arbiterFee > 0) {
i_tokenContract.safeTransfer(i_arbiter, i_arbiterFee);
}
tokenBalance = i_tokenContract.balanceOf(address(this));
if (tokenBalance > 0) {
i_tokenContract.safeTransfer(i_seller, tokenBalance);
}
}

Tools Used

Manual Review

Recommendations

To address this vulnerability and ensure a fair resolution process, I strongly recommend implementing a cap on the buyerAward, such as limiting it to a maximum percentage of the total locked price. For instance, setting a cap of 20% on the buyerAward would prevent any malicious intent by the buyer and arbiter to disproportionately benefit from the locked funds.

By introducing this cap, you can safeguard the seller's interests and maintain the contract's integrity throughout the dispute resolution process. The cap will serve as a crucial mitigation measure against potential collusion and unjust outcomes, fostering trust and transparency in the platform.

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