Foundry DeFi Stablecoin CodeHawks Audit Contest
Cyfrin
DeFiFoundry
15,000 USDC
View results
Previous Next
Submission Details
Severity: medium
Valid

Too many DSC tokens can get minted for fee-on-transfer tokens.

Bobface

Summary

The DSCEngine contract overcalculates the collateral when operating with fee-on-transfer tokens, which can lead to too many DSC tokens being minted.

Vulnerability Details

The competition description mentions that while the first use-case for the system will be a WETH/WBTC backed stablecoin, the system is supposed to generally work with any collateral tokens. If one or more collateral tokens are fee-on-transfer tokens, i.e., when transferring X tokens, only X - F tokens arrive at the recipient side, where F denotes the transfer fee, depositors get credited too much collateral, meaning more DSC tokens can get minted, which leads to a potential depeg.

The root cause is the depositCollateral function in DSCEngine:

function depositCollateral(address tokenCollateralAddress, uint256 amountCollateral)
public
moreThanZero(amountCollateral)
isAllowedToken(tokenCollateralAddress)
nonReentrant
{
s_collateralDeposited[msg.sender][tokenCollateralAddress] += amountCollateral;
emit CollateralDeposited(msg.sender, tokenCollateralAddress, amountCollateral);
bool success = IERC20(tokenCollateralAddress).transferFrom(msg.sender, address(this), amountCollateral);
if (!success) {
revert DSCEngine__TransferFailed();
}
}

As can be seen in line

bool success = IERC20(tokenCollateralAddress).transferFrom(msg.sender, address(this), amountCollateral);

the contract assumes that the full amountCollateral is received, which might not be the case with fee-on-transfer tokens.

Impact

When the contract operates with fee-on-transfer tokens as collateral, too many DSC tokens can get minted based on the overcalculated collateral, potentially leading to a depeg.

Tools Used

None

Recommendations

Check the actual amount of received tokens:

function depositCollateral(address tokenCollateralAddress, uint256 amountCollateral)
public
moreThanZero(amountCollateral)
isAllowedToken(tokenCollateralAddress)
nonReentrant
{
uint256 balanceBefore = IERC20(tokenCollateralAddress).balanceOf(address(this));
bool success = IERC20(tokenCollateralAddress).transferFrom(msg.sender, address(this), amountCollateral);
uint256 balanceAfter = IERC20(tokenCollateralAddress).balanceOf(address(this));
amountCollateral = balanceAfter - balanceBefore;
if (!success) {
revert DSCEngine__TransferFailed();
}
s_collateralDeposited[msg.sender][tokenCollateralAddress] += amountCollateral;
emit CollateralDeposited(msg.sender, tokenCollateralAddress, amountCollateral);
}

Support

FAQs

Can't find an answer? Chat with us on Discord, Twitter or Linkedin.