CodeHawks Escrow Contract - Competition Details

Summary

The audit was conducted on the Escrow.sol and EscrowFactory.sol contracts to identify potential security vulnerabilities. Several critical issues were discovered, including:

1. Lack of proper input validation using if statements, which could lead to unexpected behavior and incorrect contract execution.

2. Absence of SafeMath protection in the resolveDispute() function, which could result in arithmetic overflow.

3. Incorrect order of token transfers in the resolveDispute() function, potentially allowing the arbiter to receive more tokens than available balance.

4. Address computation vulnerability in the computeEscrowAddress() function, possibly leading to address collisions.

5. Reentrancy vulnerability in the confirmReceipt() function, which might allow malicious entities to exploit the contract's logic.

6. Insufficient access control for critical functions, posing a risk of unauthorized access to sensitive operations.

These issues can have severe implications, including fund mismanagement, financial losses, and the compromise of contract integrity. Immediate attention and action are required to address these bugs and enhance the security of the contracts.

Vulnerability Details

1. Input Validation: The contract uses if statements with revert() for input validation. It is recommended to use require() statements for improved readability and better error messages.

2. Arithmetic Overflow: The resolveDispute() function lacks SafeMath protection, potentially leading to arithmetic overflow. Implement SafeMath library for all arithmetic operations to prevent overflow errors.

3. Sequential Token Transfers: The resolveDispute() function performs token transfers before checking the total token balance. This could allow the arbiter to receive more tokens than the actual available balance. Reorder the token transfers to perform the balance check first.

4. Address Computation Vulnerability: The computeEscrowAddress() function may not guarantee address uniqueness due to missing contract type and constructor arguments in the keccak256 computation. Update the function to include these details.

5. Reentrancy Vulnerability: The confirmReceipt() function lacks reentrancy protection. Add the nonReentrant modifier from OpenZeppelin's ReentrancyGuard to prevent reentrancy attacks.

6. Access Control: Certain functions lack access control or permissions. Implement role-based access control to restrict unauthorized access to sensitive functions.

Impact

The identified vulnerabilities could potentially lead to the mismanagement of funds, incorrect token transfers, and unauthorized access to sensitive functions. These issues may expose the contract to financial loss and compromise its integrity.

Tools Used

The audit was conducted through manual code review and analysis. No automated security analysis tools were utilized during the review.

Recommendations

Based on the findings, the following recommendations are suggested to enhance the contract's security:

1. Refactor input validation using require() statements for improved readability and error messaging.

2. Implement SafeMath library for all arithmetic operations to prevent arithmetic overflow errors.

3. Reorder token transfers in resolveDispute() to perform the balance check first before transferring the arbiter fee and buyer award.

4. Update computeEscrowAddress() function to include the contract type and constructor arguments in the keccak256 computation to ensure address uniqueness.

5. Add the nonReentrant modifier to the confirmReceipt() function to prevent reentrancy attacks.

6. Implement access control to restrict certain functions to authorized roles. Consider using modifiers like onlyBuyer, onlyBuyerOrSeller, and onlyArbiter to enforce access restrictions.