Liquid Staking

Summary

The onchain ad off chain merkle proof will not match.

Vulnerability Details

The contract constructs leaf nodes for the Merkle Tree by double hashing the user data. Specifically, in functions like claimLSDTokens, withdraw, and unqueueTokens, the leaf node is constructed as follows:

bytes32 node = keccak256(````bytes.concat(keccak256(abi.encode(account, _amount, _sharesAmount)))````);

Typically, Merkle Trees are constructed by hashing the encoded user data once per leaf. Double hashing introduces discrepancies between on-chain verification and off-chain Merkle Tree construction. In this case the on-chain is hashed twice and the off-chain is hashed once.

hashing twice protects against the second preimage attack, however the ipfs is hashed once which introduces the discrepancy.

The off-chain Merkle Tree is constructed with single-hashed leaves, but on-chain verification expects double-hashed leaves, all Merkle Proofs will fail, rendering the distribution mechanism non-functional.

Also the ipfs uses abi.encode vs the on-chain abi.encodepacked. The resuls from these two abi will be different leading to inconsistent proofs.

Impact

failed markle proofs and verification

Tools Used

Manual Review

Recommendations

Ensure consistencies between the on-chain and off-chain hashing and the ABIs.

// Correct leaf node construction with single hashing

```bytes32 node = keccak256(abi.encodePacked(account, _amount, _sharesAmount));`