Tadle

Tadle
DeFiFoundry
27,750 USDC
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Submission Details
Severity: high
Valid

TokenManager::_transfer() does not call approve() properly

Summary

TokenManager::_transfer(address, address, address, uint256, address) will not work properly if the execution flow goes inside the if bracket.

https://github.com/Cyfrin/2024-08-tadle/blob/04fd8634701697184a3f3a5558b41c109866e5f8/src/core/TokenManager.sol#L243C1-L248C10

Vulnerability Details

Call in if statement will call the approve(address) on the CapitalPool contract and send the address of TokenManager as the argument.

https://github.com/Cyfrin/2024-08-tadle/blob/04fd8634701697184a3f3a5558b41c109866e5f8/src/core/CapitalPool.sol#L24C1-L39C6

This call always fails because the approve on the CapitalPool treats the argument as a token address. Approve function does not even exist on TokenManager.

Impact

Constant reverts when going into the if execution flow.

Tools Used

manual review

Recommendations

Implement a second approve/other name function on CapitalPool contract that will be called in this case. This new function should approve the TokenManager of transferring its funds.

Updates

Lead Judging Commences

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

finding-TokenManager-safeTransferFrom-withdraw-missing-approve

This issue's severity has similar reasonings to #252, whereby 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. Similarly, the argument here is the approval function `approve` was made permisionless, so if somebody beforehand calls approval for the TokenManager for the required token, 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. It also has a slightly different root cause and fix whereby an explicit approval needs to be provided before a call to `_safe_transfer_from()`, if not, the alternative `_transfer()` function should be used to provide an approval, assuming a fix was implemented for issue #252

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