Aave DIVA Wrapper

Summary

The _handleTokenOperations function in the contract does not include an explicit allowance check before attempting to transfer tokens using safeTransferFrom. This omission results in inefficiencies and poor user experience, as the function will fail at the token transfer step if sufficient allowance has not been provided. Adding an explicit allowance check at the start of the function would ensure early failure ("fail-fast") and provide more informative error feedback to the caller.

Vulnerability Details

Root Cause

• Code Location: _handleTokenOperations function

  IERC20Metadata(_collateralToken).safeTransferFrom(msg.sender, address(this), _collateralAmount);

• Description:
  The function attempts to transfer tokens without verifying that the user has been granted sufficient allowance beforehand. This can result in late failures and gas inefficiency, as the failure would occur after other steps (e.g., setting up parameters) are performed.

Attack Path

This issue is not directly exploitable; however, the following scenario demonstrates inefficiencies:

1. A user calls a function that eventually invokes _handleTokenOperations without having granted a sufficient allowance.

2. The function performs unnecessary operations (e.g., parameter setup) before failing at the token transfer step.

3. The user receives a generic error message from safeTransferFrom, leading to confusion and wasted gas costs.

Impact

1. Gas Inefficiency: Unnecessary operations are performed before the failure, wasting gas.

2. User Confusion: Without an explicit allowance check, the error message may not clearly indicate the cause of the failure, reducing usability.

3. Poor Developer Experience: Developers integrating with the contract may not realize the need for an explicit allowance check until after failed attempts.

Tools Used

• Manual code review

• ERC20 and SafeERC20 library documentation review

Recommendations

Add an explicit allowance check at the start of _handleTokenOperations to ensure the function fails fast and provides a clear error message if the allowance is insufficient.

Recommended Code Update

Benefits:

• Ensures the function fails early if allowance is insufficient.

• Provides a clear error message (InsufficientAllowance) to the user.

• It prevents unnecessary operations and reduces wasted gas.