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Tadle
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Submission Details
Severity: high
Valid

Incorrect approval in TokenManager::_transfer() will result in revert.

itsabinashb

Summary

Incorrect approval in TokenManager::_transfer() will result in revert when _from is capitalPool address & allowance for tokenManager for that token is 0

Vulnerability Details

As of the logic of TokenManager::_transfer() if _from is capitalPool address & allowance for tokenManager for that token is 0 then the function will execute this code:

ICapitalPool(_capitalPoolAddr).approve(address(this));

Notice that the argument of approve() is address(this) i.e tokenManager contract, but if you the CapitalPool::approve() the function takes a token address as argument, not tokenManager's address.

/**
* @dev Approve token for token manager
* @notice only can be called by token manager
* @param tokenAddr address of token
*/
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();
}
}

As a result all call to _transfer() will fail because APPROVE_SELECTOR is not a selector of tokenManager contract.

Impact

All call to _transfer() will fail.

Tools Used

Manual review.

Recommendations

if (
_from == _capitalPoolAddr &&
IERC20(_token).allowance(_from, address(this)) == 0x0
) {
- ICapitalPool(_capitalPoolAddr).approve(address(this));
+ ICapitalPool(_capitalPoolAddr).approve(_token);
}

Related Links

  1. https://github.com/Cyfrin/2024-08-tadle/blob/04fd8634701697184a3f3a5558b41c109866e5f8/src/core/TokenManager.sol#L243-L248

Updates

Lead Judging Commences

0xnevi Lead Judge 9 months 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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