Alchemix Transmuter

Summary

The claimAndSwap function in the contract checks for slippage by verifying that the difference between the balance before and after the swap meets a minimum threshold. However, it does not implement any advanced strategies to mitigate excessive slippage or manage failed transactions under volatile market conditions.

Vulnerability Detail

While the function includes a slippage check to ensure that the balance after the swap is above the specified minimum (_minOut), there is no fallback or retry mechanism if slippage exceeds the limit. This can result in failed transactions without a means of recovery, particularly in highly volatile market scenarios.

Impact

• Risk of Failed Transactions: If slippage exceeds the defined threshold, the entire transaction will fail, which could prevent the strategy from executing important actions.

• Loss of Funds: Due to the lack of effective slippage handling, the transaction might not achieve the expected outcome, potentially leading to a partial or failed swap and loss of potential value.

Tool used

Manual Code Review

Recommendation

• Implement a Retry Mechanism: Consider adding a strategy to retry the swap with adjusted parameters or a reduced amount if slippage exceeds the tolerance level.

• Dynamic Slippage Adjustment: Allow for dynamic adjustments to the slippage tolerance based on market conditions, so the system can adapt to price fluctuations and prevent transaction failures due to minor slippage.