QuantAMM
QuantAMM
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Submission Details
Severity: low
Valid

`UpliftOnlyExample` not compatible with Low-Decimal Tokens like `GUSD`

0xexploud

Summary

A critical vulnerability exists in the UpliftOnlyExample contract where the swap fee calculation mechanism can be circumvented when interacting with tokens having low decimal precision. This vulnerability enables users to conduct substantial trades while evading fee payments, potentially causing significant protocol revenue leakage.

Vulnerability Details

The vulnerability stems from integer division rounding behavior in the fee calculation logic of UpliftOnlyExample.sol:
https://github.com/Cyfrin/2024-12-quantamm/blob/a775db4273eb36e7b4536c5b60207c9f17541b92/pkg/pool-hooks/contracts/hooks-quantamm/UpliftOnlyExample.sol#L293-L299

function afterSwap(SwapPostParams memory params) public {
// ...
uint256 hookFee = params.amountCalculatedRaw.mulUp(hookSwapFeePercentage);
// ...
}

Any amount where baseUnits * feeRate < 1e18 results in zero fees.

This can be easily achieved for very low decimal tokens. One such token is GUSD with decimals=2.

Impact

Systematic fee evasion through precision manipulation

Tools Used

Manual Review

Recommendations

Use fee brackets with minimum absolute fee

Updates

Lead Judging Commences

n0kto Lead Judge 4 months ago
Submission Judgement Published
Validated
Assigned finding tags:

finding_tokens_with_few_decimals_can_bypass_fees

Likelyihood: Very Low, tokens with 2 or less decimals and few fees. Impact: Low, bypass fees but for very few amounts, gas usage will be equivalent. (No reason to break a big swap in multiple)

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