Part 2

Summary

The ZlpVault contract inherits upgradeability via OpenZeppelin’s UUPSUpgradeable pattern but grants exclusive upgrade rights to the contract owner. This centralization introduces a single point of failure, enabling malicious logic replacement that could drain funds, disable withdrawals, or manipulate LP rewards.

Vulnerability Details

Affected Code:

The UUPS upgrade pattern is implemented with critical flaws:

1. Single-Point Failure: onlyOwner modifier grants unilateral upgrade rights

2. No Timelock: Immediate execution of upgrades

3. No Governance Oversight: Complete owner discretion

Exploit Scenario:

1. Attacker compromises owner's private key (phishing/social engineering)

2. Deploys malicious implementation contract with selfdestruct or transferAll logic

3. Calls upgradeToAndCall() with malicious contract address

4. Drains all vault assets in one transaction

Proof of Concept:

Impact

High Impact: All LP funds can be stolen (~$X million TVL at risk)

High Likelihood: Single-owner compromise is common attack vector

Critical Risk: Permanent protocol shutdown possible via selfdestruct

Tools Used

Manual Review, Slither, Foundry

Recommendations

1. Implement TimelockController for upgrade delays:

1. Transition to DAO governance using OpenZeppelin Governor

2. Remove onlyOwner pattern entirely