Liquidity Management
Gamma
DeFiFoundry
50,000 USDC
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Submission Details
Severity: low
Invalid

Token Loss for the owner of the deposit Due to Transfer Failure in _transferToken

bhorprakash

Description

The _handleReturn function calls the _transferToken

​
function _handleReturn(uint256 withdrawn, bool positionClosed, bool refundFee) internal {
...
if (amount > 0) {
@=> _transferToken(depositId, amount);
}
emit Burned(depositId, depositInfo[depositId].recipient, depositInfo[depositId].shares, amount);
@=> _burn(depositId);
​
...

If the token transfer to the recipient fails (e.g., due to the recipient being blacklisted on USDC or a failed USDT transfer), the contract catches the error and instead transfers the amount to the treasury.after the funds transferred to the treasury it deletes the depositInfo of the user in the _burn function.

function _transferToken(uint256 depositId, uint256 amount) internal {
uint256 fee;
if (amount > depositInfo[depositId].amount) {
fee = (amount - depositInfo[depositId].amount) * governanceFee / BASIS_POINTS_DIVISOR;
if (fee > 0) {
collateralToken.safeTransfer(treasury, fee);
}
}
@=> try collateralToken.transfer(depositInfo[depositId].recipient, amount - fee) {}
catch {
@=> collateralToken.transfer(treasury, amount - fee);
emit TokenTranferFailed(depositInfo[depositId].recipient, amount - fee);
}
totalDepositAmount -= depositInfo[depositId].amount;
emit GovernanceFeeCollected(address(collateralToken), fee);
}
​

_burn function

function _burn(uint256 depositId) internal {
EnumerableSet.remove(userDeposits[depositInfo[depositId].owner], depositId);
totalShares = totalShares - depositInfo[depositId].shares;
@=> delete depositInfo[depositId];
}

Impact

The user permanently loses their funds which contradicts expected behavior.

Recommendation:

Implement a claimable balance mechanism. If a transfer fails, store the amount in a mapping so the user can claim it later instead of immediately sending it to the treasury.

Updates

Lead Judging Commences

n0kto Lead Judge 8 months ago
Submission Judgement Published
Invalidated
Reason: Design choice
Assigned finding tags:

Admin is trusted / Malicious keepers

Please read the CodeHawks documentation to know which submissions are valid. If you disagree, provide a coded PoC and explain the real likelihood and the detailed impact on the mainnet without any supposition (if, it could, etc) to prove your point. Keepers are added by the admin, there is no "malicious keeper" and if there is a problem in those keepers, that's out of scope. ReadMe and known issues states: " * System relies heavily on keeper for executing trades * Single keeper point of failure if not properly distributed * Malicious keeper could potentially front-run or delay transactions * Assume that Keeper will always have enough gas to execute transactions. There is a pay execution fee function, but the assumption should be that there's more than enough gas to cover transaction failures, retries, etc * There are two spot swap functionalies: (1) using GMX swap and (2) using Paraswap. We can assume that any swap failure will be retried until success. " " * Heavy dependency on GMX protocol functioning correctly * Owner can update GMX-related addresses * Changes in GMX protocol could impact system operations * We can assume that the GMX keeper won't misbehave, delay, or go offline. " "Issues related to GMX Keepers being DOS'd or losing functionality would be considered invalid."

n0kto Lead Judge 8 months ago
Submission Judgement Published
Invalidated
Reason: Design choice
Assigned finding tags:

Admin is trusted / Malicious keepers

Please read the CodeHawks documentation to know which submissions are valid. If you disagree, provide a coded PoC and explain the real likelihood and the detailed impact on the mainnet without any supposition (if, it could, etc) to prove your point. Keepers are added by the admin, there is no "malicious keeper" and if there is a problem in those keepers, that's out of scope. ReadMe and known issues states: " * System relies heavily on keeper for executing trades * Single keeper point of failure if not properly distributed * Malicious keeper could potentially front-run or delay transactions * Assume that Keeper will always have enough gas to execute transactions. There is a pay execution fee function, but the assumption should be that there's more than enough gas to cover transaction failures, retries, etc * There are two spot swap functionalies: (1) using GMX swap and (2) using Paraswap. We can assume that any swap failure will be retried until success. " " * Heavy dependency on GMX protocol functioning correctly * Owner can update GMX-related addresses * Changes in GMX protocol could impact system operations * We can assume that the GMX keeper won't misbehave, delay, or go offline. " "Issues related to GMX Keepers being DOS'd or losing functionality would be considered invalid."

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