Zaros Part 1

Summary

This report highlights various vulnerabilities found in the smart contract related to trading accounts and margin management. The vulnerabilities are categorized by severity and include issues with delegatecall risks, access control, arithmetic operations, and more. Recommendations are provided to mitigate these risks.

Vulnerability Details

Medium Severity Vulnerabilities

1. Delegatecall Risks in createTradingAccountAndMulticall Function

   • Issue: The createTradingAccountAndMulticall function uses delegatecall to execute multiple arbitrary calls. This introduces risks if any of these calls are malicious or if the delegatecall is not properly handled.

   • Mitigation: Validate and sanitize all data before using it in delegatecall. Implement additional checks to ensure the safety of data payloads.

2. Lack of Access Control in depositMargin Function

   • Issue: The depositMargin function allows anyone to deposit margin collateral into any trading account without verifying the account owner.

   • Mitigation: Add checks to ensure only the account owner or authorized parties can deposit collateral. Alternatively, if this behavior is intended, document it clearly to avoid misunderstandings.

3. Potential Integer Overflow/Underflow

   • Issue: Although Solidity 0.8.x has built-in overflow/underflow checks, it is crucial to handle all arithmetic operations correctly. Ensure all calculations are accurately scaled and handled to avoid unintended results.

   • Mitigation: Validate inputs and check arithmetic operations thoroughly, especially in financial calculations.

High Severity Vulnerabilities

1. Unchecked External Calls

   • Issue: Functions like depositMargin and withdrawMargin make external calls to ERC20 tokens. If the token contract does not adhere to the ERC20 standard or has vulnerabilities, it may lead to unexpected behavior or loss of funds.

   • Mitigation: Use the SafeERC20 library to ensure safe token transfers. Perform additional checks on token interactions.

2. Referral Code Validation

   • Issue: The referral code validation in createTradingAccount allows anyone to set a referral code, which could pose risks if custom referral configurations are not validated properly.

   • Mitigation: Ensure referral codes are thoroughly validated, especially when dealing with external user inputs. Add more robust checks or conditions if needed.

3. Unchecked Arithmetic in getAccountMarginBreakdown

   • Issue: The getAccountMarginBreakdown function may be vulnerable to integer overflow/underflow during arithmetic operations on margin balances and margins.

   • Mitigation: Safeguard all arithmetic operations against potential overflows and underflows. Validate values before performing calculations.

Low Severity Vulnerabilities

1. Lack of Documentation for Error Messages

   • Issue: Some functions lack detailed error messages or require more descriptive error handling, complicating debugging.

   • Mitigation: Add comprehensive comments and error messages to all functions to enhance readability and debugging.

2. Possible Gas Limit Exceeded

   • Issue: Functions performing loops or complex operations, such as getAccountMarginBreakdown, could exceed the gas limit in certain cases.

   • Mitigation: Optimize loop operations and consider breaking them into smaller functions if necessary. Monitor and manage gas consumption effectively.

Impact

The identified vulnerabilities could potentially lead to serious issues such as unauthorized access to accounts, loss of funds, and exploitation of contract functionalities. High-severity vulnerabilities, in particular, pose significant risks that could impact the integrity and security of the contract.

Tools Used

• Solidity Compiler

• Manual Code Review

• SafeERC20 Library for ERC20 token interactions

• Testing Frameworks (e.g., Truffle, Hardhat)

Recommendations

1. For Delegatecall Risks: Validate and sanitize all data used in delegatecall. Implement additional security checks to ensure the integrity of the data payloads.

2. For Access Control Issues: Implement access control checks in the depositMargin function. Ensure only authorized parties can deposit collateral, or document this behavior if intended.

3. For Integer Overflow/Underflow: Validate inputs and handle arithmetic operations with care to prevent unintended results.

4. For Unchecked External Calls: Use the SafeERC20 library and perform additional checks on token interactions to prevent unexpected behavior.

5. For Referral Code Validation: Thoroughly validate referral codes and enhance checks for user inputs.

6. For Gas Limit Issues: Optimize functions with loops or complex operations and monitor gas consumption to prevent exceeding limits.

Additional Considerations:

• Perform thorough testing of the contract with various scenarios.

• Consider a formal audit by a security expert to address potential vulnerabilities.

• Adhere to Solidity and smart contract best practices for safety and efficiency.