Tadle

ERC-20 Approve Race Condition Vulnerability

Summary

The audit has identified a vulnerability related to the ERC-20 approve function within the TokenManager contract. This vulnerability arises from a potential race condition that can occur when multiple transactions concurrently interact with the same ERC-20 token contract. This race condition can lead to unexpected behavior and compromise the integrity of token transfers.

Vulnerability Details

• Issue: The contract is susceptible to the ERC-20 approve race condition vulnerability. This occurs when concurrent transactions attempt to interact with the same ERC-20 token contract, leading to conflicts due to the non-atomic nature of approve and transferFrom operations.

• Location: /src/core/TokenManager.sol

• Relevant Code:

  solidity

  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); uint256 fromBalanceAft = IERC20(_token).balanceOf(_from); uint256 toBalanceAft = IERC20(_token).balanceOf(_to); if (fromBalanceAft != fromBalanceBef - _amount) { revert TransferFailed(); } if (toBalanceAft != toBalanceBef + _amount) { revert TransferFailed(); } }

Impact

• Race Condition: Multiple concurrent transactions could exploit the race condition by manipulating the approve and transferFrom functions, potentially leading to unexpected behavior, double-spending, or failed transfers.

• Security: This vulnerability can be exploited by malicious actors to disrupt token transfers and compromise the contract’s functionality and integrity.

Recommendations

1. Implement Locking Mechanisms:

   • Mutex or Reentrancy Guards: Utilize locking mechanisms or reentrancy guards to ensure that only one transaction can modify the token balances or allowances at a time. This prevents race conditions by making sure that operations are atomic and indivisible.

2. Update Approval Mechanism:

   • Set Allowances Safely: Instead of resetting the allowance to zero and then setting a new value, which can be exploited, consider implementing a safe approval pattern or using the increaseAllowance and decreaseAllowance functions provided by ERC-20 contracts.

3. Refactor _transfer Function:

   • Atomic Operations: Ensure that all operations within the _transfer function are performed atomically and handle potential race conditions by using appropriate locking or state management techniques.

4. Testing and Validation:

   • Thorough Testing: Conduct thorough testing, including concurrency tests, to ensure that the contract behaves correctly under concurrent transactions and that race conditions are mitigated.

Fixed Code Example

Before:

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); uint256 fromBalanceAft = IERC20(_token).balanceOf(_from); uint256 toBalanceAft = IERC20(_token).balanceOf(_to); if (fromBalanceAft != fromBalanceBef - _amount) { revert TransferFailed(); } if (toBalanceAft != toBalanceBef + _amount) { revert TransferFailed(); } }

After:

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); // Ensure the approval is handled safely if (_from == _capitalPoolAddr) { uint256 allowance = IERC20(_token).allowance(_from, address(this)); if (allowance < _amount) { ICapitalPool(_capitalPoolAddr).approve(address(this)); } } // Locking mechanism to prevent race conditions // (Pseudo-code, replace with actual implementation) // _lock(); _safe_transfer_from(_token, _from, _to, _amount); // (Pseudo-code, replace with actual implementation) // _unlock(); uint256 fromBalanceAft = IERC20(_token).balanceOf(_from); uint256 toBalanceAft = IERC20(_token).balanceOf(_to); if (fromBalanceAft != fromBalanceBef - _amount) { revert TransferFailed(); } if (toBalanceAft != toBalanceBef + _amount) { revert TransferFailed(); } }

Note: Replace the pseudo-code for locking mechanisms with actual implementation suitable for your contract.

Conclusion

The ERC-20 approve race condition vulnerability can lead to significant issues if not addressed properly. By implementing locking mechanisms, refining approval procedures, and ensuring atomic operations, you can mitigate these risks and enhance the security and reliability of the contract. Thorough testing and validation are essential to ensure the contract performs correctly under concurrent transaction scenarios.