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Submission Details
Severity: high
Valid

`TokenManager::_transfer(..)` is implemented wrongly and can lead to a DOS

audinarey

Summary

The TokenManager::_transfer(..)uses the wrong parameter for approving the token manager during transfer

Vulnerability Details

As shown below, the TokenManager::_transfer(..)first checks if the token manager has approval to spend for the capital pool if transfers are being made outside

function _transfer(
address _token,
address _from,
address _to,
uint256 _amount,
address _capitalPoolAddr
) internal {
uint256 fromBalanceBef = IERC20(_token).balanceOf(_from);
uint256 toBalanceBef = IERC20(_token).balanceOf(_to);
​
if (
_from == _capitalPoolAddr &&
IERC20(_token).allowance(_from, address(this)) == 0x0
) {
@> ICapitalPool(_capitalPoolAddr).approve(address(this));
}
​
_safe_transfer_from(_token, _from, _to, _amount); // @audit reentrancy from here
​
...
}

However as seen below in the implementation of the CapitalPool::approve(...)function , the function is called with token to give approval for and not the address to be approved (tokenManager)

function approve(address tokenAddr) external {
address tokenManager = tadleFactory.relatedContracts(
RelatedContractLibraries.TOKEN_MANAGER
);
(bool success, ) = tokenAddr.call( //
abi.encodeWithSelector(
APPROVE_SELECTOR,
tokenManager,
type(uint256).max
)
);
​
if (!success) {
revert ApproveFailed();
}
}

Impact

DOS because the token manager does not have the function to be called and it is not an approved or whitlisted token in itself

Tools Used

Manaul review

Recommendations

Modify the TokenManager::_transfer(..)function as shown below

function _transfer(
address _token,
address _from,
address _to,
uint256 _amount,
address _capitalPoolAddr
) internal {
uint256 fromBalanceBef = IERC20(_token).balanceOf(_from);
uint256 toBalanceBef = IERC20(_token).balanceOf(_to);
​
if (
_from == _capitalPoolAddr &&
IERC20(_token).allowance(_from, address(this)) == 0x0
) {
- ICapitalPool(_capitalPoolAddr).approve(address(this));
+ ICapitalPool(_capitalPoolAddr).approve(_token);
}
​
_safe_transfer_from(_token, _from, _to, _amount); // @audit reentrancy from here
​
...
}
Updates

Lead Judging Commences

0xnevi Lead Judge about 1 year ago
Submission Judgement Published
Validated
Assigned finding tags:

finding-TokenManager-approve-wrong-address-input

If we consider the correct permissioned implementation for the `approve()` function within `CapitalPool.sol`, this would be a critical severity issue, because the withdrawal of funds will be permanently blocked and must be rescued by the admin via the `Rescuable.sol` contract, given it will always revert [here](https://github.com/Cyfrin/2024-08-tadle/blob/04fd8634701697184a3f3a5558b41c109866e5f8/src/core/CapitalPool.sol#L36-L38) when attempting to call a non-existent function selector `approve` within the TokenManager contract. The argument up in the air is since the approval function `approve` was made permisionless, the `if` block within the internal `_transfer()` function will never be invoked if somebody beforehand calls approval for the TokenManager for the required token, so the transfer will infact not revert when a withdrawal is invoked. I will leave open for escalation discussions, but based on my first point, I believe high severity is appropriate.

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