Summary

The L2TokenReceiver contract does not allow owner to submit a deadline for their actions which execute swaps on Uniswap V3. This missing feature enables pending transactions to be maliciously executed at a later point.

Vulnerability Details

AMMs provide their users with an option to limit the execution of their pending actions, such as swaps or adding and removing liquidity. The most common solution is to include a deadline timestamp as a parameter (for example see Uniswap V2 and Uniswap V3). If such an option is not present, users can unknowingly perform bad trades:

Alice wants to swap 100 tokens for 1 ETH and later sell the 1 ETH for 1000 DAI.

The transaction is submitted to the mempool, however, Alice chose a transaction fee that is too low for miners to be interested in including her transaction in a block. The transaction stays pending in the mempool for extended periods, which could be hours, days, weeks, or even longer.
When the average gas fee dropped far enough for Alice's transaction to become interesting again for miners to include it, her swap will be executed. In the meantime, the price of ETH could have drastically changed. She will still get 1 ETH but the DAI value of that output might be significantly lower. She has unknowingly performed a bad trade due to the pending transaction she forgot about.

An even worse way this issue can be maliciously exploited is through MEV:

The swap transaction is still pending in the mempool. Average fees are still too high for miners to be interested in it. The price of tokens has gone up significantly since the transaction was signed, meaning Alice would receive a lot more ETH when the swap is executed. But that also means that her maximum slippage value (sqrtPriceLimitX96 and minOut) is outdated and would allow for significant slippage.
A MEV bot detects the pending transaction. Since the outdated maximum slippage value now allows for high slippage, the bot sandwiches Alice, resulting in significant profit for the bot and significant loss for Alice.

Impact

Users can be frontrun and receive a worse price than expected when they initially submitted the transaction. There's no protection at all for the trade transaction which means the trade can be delayed by miners or users congesting the network, as well as being sandwich attacked - ultimately leading to loss of user funds.

Tools Used

solodit

Recommendations

Introduce a deadline parameter to all functions which potentially perform a swap on the user's behalf.