First Flight #18: T-Swap
First Flight #18
Beginner FriendlyDeFiFoundry
100 EXP
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Submission Details
Severity: high
Valid

`TswapPool::_swap` gives extra tokens to the swapper after the 10 swaps indicated by the variable `SWAP_COUNT_MAX` which breaks the invarinat `x * y = k`.

sheep

**Description:**The protocol follows a strict invariant of x * y = k. Where:

  • x: The balance of the pool token

  • y: The balance of WETH

  • k: The constant product of the two balances

This means, that whenever the balances change in the protocol, the ratio between the two amounts should remain constant, hence the k. However, this is broken due to the extra incentive in the _swap function. Meaning that over time the protocol funds will be drained.

The follow block of code is responsible for the issue.

swap_count++;
if (swap_count >= SWAP_COUNT_MAX) {
swap_count = 0;
outputToken.safeTransfer(msg.sender, 1_000_000_000_000_000_000);
}

**Impact:**A user could maliciously drain the protocol of funds by doing a lot of swaps and collecting the extra incentive given out by the protocol.

Proof Of Concept:

function testInvariantGetsBroken() public{
vm.startPrank(liquidityProvider);
weth.approve(address(pool), 100e18);
poolToken.approve(address(pool), 100e18);
pool.deposit(100e18, 100e18, 100e18, uint64(block.timestamp));
vm.stopPrank();
​
uint256 outputWeth = 1e17;
​
vm.startPrank(user);
poolToken.approve(address(pool), type(uint256).max);
poolToken.mint(user, 100e18);
pool.swapExactOutput(poolToken, weth, outputWeth, uint64(block.timestamp));
pool.swapExactOutput(poolToken, weth, outputWeth, uint64(block.timestamp));
pool.swapExactOutput(poolToken, weth, outputWeth, uint64(block.timestamp));
pool.swapExactOutput(poolToken, weth, outputWeth, uint64(block.timestamp));
pool.swapExactOutput(poolToken, weth, outputWeth, uint64(block.timestamp));
pool.swapExactOutput(poolToken, weth, outputWeth, uint64(block.timestamp));
pool.swapExactOutput(poolToken, weth, outputWeth, uint64(block.timestamp));
pool.swapExactOutput(poolToken, weth, outputWeth, uint64(block.timestamp));
pool.swapExactOutput(poolToken, weth, outputWeth, uint64(block.timestamp));
​
int256 startingY = int256(weth.balanceOf(address(pool)));
int256 expectedChangeInY = int256(-1) * int256(outputWeth);
​
pool.swapExactOutput(poolToken, weth, outputWeth, uint64(block.timestamp));
vm.stopPrank();
​
uint256 endingY = weth.balanceOf(address(pool));
int256 actualChangeInY = int256(endingY) - int256(startingY);
assert(actualChangeInY == expectedChangeInY);
​
}

Recommended Mitigation:

function _swap(
IERC20 inputToken,
uint256 inputAmount,
IERC20 outputToken,
uint256 outputAmount
) private {
if (
_isUnknown(inputToken) ||
_isUnknown(outputToken) ||
inputToken == outputToken
) {
revert TSwapPool__InvalidToken();
}
​
- swap_count++;
- if (swap_count >= SWAP_COUNT_MAX) {
- swap_count = 0;
- outputToken.safeTransfer(msg.sender, 1_000_000_000_000_000_000);
- }
emit Swap(
msg.sender,
inputToken,
inputAmount,
outputToken,
outputAmount
);
​
inputToken.safeTransferFrom(msg.sender, address(this), inputAmount);
outputToken.safeTransfer(msg.sender, outputAmount);
}
​
​
Updates

Appeal created

inallhonesty Lead Judge over 1 year ago
Submission Judgement Published
Validated
Assigned finding tags:

In `TSwapPool::_swap` the extra tokens given to users after every swapCount breaks the protocol invariant of x * y = k

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