Alchemix Transmuter

Summary

The StrategyOP contract fails to revoke token approvals when updating the router address, potentially leaving lingering unlimited approvals on old router addresses.

Description

The vulnerability stems from two design oversights:

1. No explicit approval management during router updates

2. Missing function to update router address safely

Vulnerable Code

Current Implementation in _initStrategy:

Here we approve type(uint256).max amount of underlying tokens to router which is hardcoded.
The setRouter() function is used to set another address as router by management in StategyOp.sol but it doesn't revoke the approval of tokens to 0 of past router address.

Impact

1. Potential unauthorized access to underlying tokens

2. Multiple routers having simultaneous unlimited approvals

3. Risk of fund loss if old router is compromised

Recommendations

Implement proper router update function:

Reference Findings:

https://solodit.cyfrin.io/issues/01-lingering-token-approvals-in-landmanager-may-lead-to-unauthorized-staking-of-munchables-code4rena-munchables-munchables-git

https://solodit.cyfrin.io/issues/l-08-no-way-to-revoke-approval-for-unsupported-assets-pashov-audit-group-none-ionprotocol-july-markdown

https://solodit.cyfrin.io/issues/l-05-no-way-to-revoke-approval-from-blacklisted-operators-pashov-audit-group-none-sofamon-august-markdown

https://solodit.cyfrin.io/issues/l-07-approvals-should-be-revoked-when-unstaking-in-honeylockersol-pashov-audit-group-none-interpol-markdown