First Flight #18: T-Swap

Summary :

The swapExactOutput function does not include any sort of slippage protection. This function is similar to what is done in TSwapPool::swapExactInput, where the function specifies a minOutputAmount, the swapExactOutput function should specify a maxInputAmount.

Vulnerability Details:

1. The price of 1 WETH right now is 1,000 USDC 2. User inputs aswapExactOutput looking for 1 WETH 1. inputToken = USDC

2. outputToken = WETH 3. outputAmount = 1 4. deadline = whatever

3. The function does not offer a maxInput amount

4. As the transaction is pending in the mempool, the market changes! And the price moves HUGE -> 1 WETH is now 10,000 USDC. 10x more than the user expected

5. The transaction completes, but the user sent the protocol 10,000 USDC instead of the expected 1,000 USDC

Impact:

If market conditions change before the transaction processes, the user could get a much worse swap.

Tools Used

Recommendations:

We should include a maxInputAmount so the user only has to spend up to a specific amount, and can predict how much they will spend on the protocol.

function swapExactOutput(
IERC20 inputToken,
+ uint256 maxInputAmount,
.
.
.
inputAmount = getInputAmountBasedOnOutput(outputAmount,
inputReserves, outputReserves);

• if(inputAmount > maxInputAmount){

• revert();

• }
  _ swap(inputToken, inputAmount, outputToken, outputAmount)