Part 2

Summary

The MarketMakingEngine inherits UpgradeBranch, which likely contains logic for upgrading contract implementations. If this branch lacks proper access control, an attacker could replace critical logic to drain funds or disrupt protocol operations

Vulnerability Details

Affected Code Structure:

Key Risk Factors:

1. Inherited Upgrade Logic: The UpgradeBranch (not shown) may contain functions like upgradeImplementation() that lack proper access control.

2. Proxy Initialization Risk: The RootProxy constructor initializes the proxy system but may not properly lock implementations post-deployment.

Exploit Scenario:

1. Attacker gains temporary ownership (via social engineering or compromised key)

2. Calls upgradeImplementation() to deploy malicious logic in CreditDelegationBranch

3. Steals all delegated liquidity through manipulated functions

Impact

High Impact: Complete protocol control and fund theft

High Likelihood: Proxy upgrade attacks are common in modular architectures

Critical Risk: Chain-wide impact due to core protocol position

Tools Used

Manual code analysis

Proxy pattern

Recommendations

1. Implement strict access control for upgrade functions:

1. Use TimelockController for upgrade delays

2. Add implementation freeze after initial setup