## Summary

The `Swan` contract lacks proper validation of `royaltyFee` when creating buyer agents and calculating fees in `transferRoyalties`. This oversight allows setting arbitrarily high royalty fees that could exceed 100% of the asset price, potentially leading to excessive fee collection and incorrect fund distribution. ## Vulnerability Details The vulnerability exists in two key areas: 1. **Missing Royalty Fee Validation in Buyer Creation**: ```solidity:Swan.sol function createBuyer( string calldata _name, string calldata _description, uint96 _feeRoyalty, uint256 _amountPerRound ) external returns (BuyerAgent) { // No validation of _feeRoyalty BuyerAgent agent = buyerAgentFactory.deploy(_name, _description, _feeRoyalty, _amountPerRound, msg.sender); emit BuyerCreated(msg.sender, address(agent)); return agent; }

1. Unsafe Fee Calculations in transferRoyalties:

Attack Scenario

1. Attacker creates a buyer agent with royaltyFee = 200 (200%)

2. For an asset listed at 100 tokens:

   • buyerFee = (100 * 200) / 100 = 200 tokens

   • This already exceeds the original price

3. Platform fee calculation is then applied to the inflated amount:

   • If platformFee = 10, then driaFee = (200 * 10) / 100 = 20 tokens

4. Result: Seller pays more in fees than the asset's price

Impact

Severity: High

1. Financial Impact:

   • Sellers could pay excessive fees exceeding asset prices

   • Incorrect distribution of funds between buyers and platform

   • Potential for economic manipulation of the marketplace

2. Trust & Usability:

   • Undermines the fairness of the fee system

   • Could deter legitimate sellers from using the platform

   • Reputation damage to the protocol

Tools Used

• Manual code review

• Static analysis

• Mathematical validation of fee calculations

Recommendations

1. Add Fee Validation in Buyer Creation:

1. Add Safety Checks in Fee Calculations:

1. Consider Using Fixed-Point Arithmetic:

   • Implement a fixed-point math library for fee calculations

   • This would provide more precise fee calculations and prevent rounding errors

2. Add Events for Fee Transfers: