QuantAMM
QuantAMM
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Submission Details
Severity: high
Valid

In `onAfterSwap` function, the calculation for `adminFee` is incorrect

biakia

Summary

The vulnerability in the current logic arises in the way the variable quantAMMSwapFeeTake affects the calculation of adminFee within the onAfterSwap function. Specifically, the way the division operation is structured can lead to incorrect fee distribution when the value of quantAMMSwapFeeTake is set to values greater than 0 but less than 1e18.

Vulnerability Details

In UpliftOnlyExample contract, the onAfterSwap function will calculate the adminFee if quantAMMSwapFeeTake is greater than 0:

uint256 quantAMMFeeTake = IUpdateWeightRunner(_updateWeightRunner).getQuantAMMUpliftFeeTake();
uint256 ownerFee = hookFee;
​
if (quantAMMFeeTake > 0) {
uint256 adminFee = hookFee / (1e18 / quantAMMFeeTake);
ownerFee = hookFee - adminFee;
address quantAMMAdmin = IUpdateWeightRunner(_updateWeightRunner).getQuantAMMAdmin();
_vault.sendTo(feeToken, quantAMMAdmin, adminFee);
emit SwapHookFeeCharged(quantAMMAdmin, feeToken, adminFee);
}

When quantAMMSwapFeeTake is set to a value like 0.9e18 (which corresponds to 90%), the formula uint256 adminFee = hookFee / (1e18 / quantAMMFeeTake) results in dividing by 1(1e18/0.9e18 = 1), which does not appropriately reflect the intended allocation for the admin fee. The result is that adminFee becomes the entire hookFee, thus assigning 100% of the fee instead of the intended 90%.

This logical mistake in fee calculation can lead to unintended financial outcomes where the protocol retains far greater earnings than anticipated by its economic structure, potentially leading to user dissatisfaction and undermining the trust in the protocol’s fee management policies.

Impact

The impact is MEDIUM, the likelihood is MEDIUM, so the severity is MEDIUM.

Tools Used

Manual Review

Recommendations

Consider following fix:

uint256 adminFee = hookFee.mulDown(quantAMMSwapFeeTake) / 1e18;
Updates

Lead Judging Commences

n0kto Lead Judge 7 months ago
Submission Judgement Published
Validated
Assigned finding tags:

finding_onAfterSwap_adminFee_overestimated_solidity_rounding_down

Likelyhood: High, quantAMMFeeTake is a percentage on calculated fees. Being between 30-70% is very likely. Impact: High, fees for LP providers will be lower than expected and 0 if the admin fees is above 50%.

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