Pieces Protocol

Summary

In the original transferErcTokens function, the state is updated before confirming the success of the external transfer. This can lead to inconsistencies in the contract’s state if the external transfer fails after state changes are applied, which is a violation of the CEI (Checks-Effects-Interactions) pattern.

Vulnerability Details

• The state changes (updating balances) occur before the external transfer is confirmed.

• If the external transfer fails (due to insufficient funds, transaction reversion, etc.), the contract's state will already be modified, leading to inconsistent or incorrect balances.

• This creates a potential risk for funds being lost or misallocated due to the mismatch between the internal state and external contract state.

Impact

• Inconsistent State: If the external token transfer fails after updating the state, the internal balances may not match the true token holdings.

• Security Risk: Attackers could exploit this inconsistency by manipulating balances, leading to incorrect fund allocations or even the possibility of a reentrancy attack in certain cases.

Tools Used

Manual code review

Recommendations

1. Follow CEI Pattern: Ensure that state changes are made only after the success of the external transfer.

2. Revised Function: Update the function to:

   • Perform checks first (input validation, balance checks).

   • Perform external interaction (transfer tokens) next.

   • Update the state and emit events only if the external interaction is successful.

By adopting this pattern, the contract ensures that its state remains consistent, and external interactions will not cause unwanted side effects or vulnerabilities.