Summary

The _swap function in the TSwapPool contract breaks the protocol's invariant of x * y = k due to the extra tokens given to users after every swapCount. This invariant ensures that the product of the balances of the pool token (x) and WETH (y) remains constant (k). However, the additional incentive distributed in the _swap function disrupts this balance, leading to the potential draining of protocol funds over time.

Vulnerability Details

The TSwapPool protocol adheres to a strict invariant of x * y = k, where x represents the balance of the pool token, y represents the balance of WETH, and k is a constant. This invariant is essential for maintaining the protocol's stability and ensuring fair exchanges. However, the following code block in the _swap function breaks this invariant:

This block increments swap_count and, when swap_count reaches SWAP_COUNT_MAX, resets it to zero and transfers an extra 1 ETH (1,000,000,000,000,000,000 wei) to the user. This additional transfer disrupts the balance between x and y, violating the x * y = k invariant and leading to an imbalance in the protocol.

Impact

1. Invariant Violation: The protocol's fundamental invariant of x * y = k is broken, leading to potential imbalances in the pool.

2. Funds Draining: Over time, the extra tokens given to users can drain the protocol's funds, reducing liquidity and stability.

3. Unfair Advantage: Users can receive more tokens than they should, leading to an unfair advantage and potential exploitation.

Tools Used

1. Manual Code Review

Recommendations

To fix this vulnerability, remove the block of code that transfers extra tokens to users in the _swap function. Instead, consider implementing a different incentive mechanism that does not disrupt the x * y = k invariant.