Summary

Vulnerability Details

The function transfers amount of bidToken from msg.sender to the treasury.

• After transferring the tokens, the function updates the state by increasing the bid amount for the current epoch.

• An attacker can exploit this function by creating a reentrancy attack where the state is not updated correctly before making another call to bid.

https://github.com/Cyfrin/2024-07-templegold/blob/57a3e597e9199f9e9e0c26aab2123332eb19cc28/protocol/contracts/templegold/DaiGoldAuction.sol#L132

Impact

• Double Spending: The attacker can exploit the reentrancy to call the bid function multiple times, each time thinking they have more tokens than they actually do.

• State Manipulation: The auction state (e.g., total bid amount) can be manipulated to show incorrect values.

• Financial Loss: The contract could lose tokens or distribute more Temple Gold than intended due to manipulated bids.

Real-World Example

A famous real-world example of a reentrancy attack is the DAO hack, where an attacker exploited a reentrancy vulnerability to drain millions of dollars from the DAO smart contract.

How Reentrancy Attack Works:

1. Initial Call: The attacker calls the bid function.

2. Token Transfer: Before the state is updated, the safeTransferFrom function transfers tokens.

3. Reenter: Using a fallback function or another contract, the attacker reenters the bid function before the previous execution completes.

4. Repeat: The bid function is called again, possibly transferring more tokens or manipulating the state multiple times.

Tools Used

vs code

Recommendations

• Use a reentrancy guard to prevent multiple simultaneous entries into the function.