Summary

https://github.com/Cyfrin/2025-01-zaros-part-2/blob/39e33b2f6b3890573bb1affc41a7e520277ceb2c/src/zlp/ZlpVault.sol#L213

The contract employs the UUPS (Universal Upgradeable Proxy Standard) upgradeability pattern, which has inherent risks due to the direct access it provides to the upgrade mechanism. If the _authorizeUpgrade function is not implemented securely, it could allow unauthorized or malicious upgrades, compromising the contract's integrity and functionality.

Vulnerability Details

Minimal Authorization Logic:
The _authorizeUpgrade function relies solely on the onlyOwner modifier, which checks that the caller is the contract owner. If ownership is transferred accidentally, or if the owner account is compromised, an attacker could perform malicious upgrades.

Ownership Risk:
Ownership is a single point of failure. If ownership is transferred to an untrusted address or lost, the contract becomes vulnerable to unauthorized upgrades.

Upgradeability Risks:
Malicious upgrades could introduce backdoors, change the functionality of the contract to siphon funds, or disrupt critical operations.

Lack of Multi-Signature Governance:
The upgradeability mechanism lacks multi-signature or decentralized governance, increasing the risk of centralization and unauthorized changes.

Exploitation Scenario:

An attacker compromises the owner's private key and calls the upgradeTo function to deploy a malicious implementation contract.

The new implementation could, for instance, transfer all vault assets to the attacker's address.

Impact

Loss of Control: The contract's functionality could be altered to benefit a malicious actor.

Loss of Funds: Assets stored in the contract could be drained.

Ecosystem Trust Damage: Exploitation of the upgrade mechanism can undermine user confidence in the contract's security.

Tools Used

Manual Review

Recommendations

Implement Multi-Signature Governance

Require multiple trusted parties to approve an upgrade. Use a multi-signature wallet such as Gnosis Safe to manage ownership.

Example Implementation: