Core Contracts
Regnum Aurum Acquisition Corp
HardhatReal World AssetsNFT
77,280 USDC
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Submission Details
Severity: high
Invalid

Double Taxation on RAACToken.burn

ace_30

Summary

The RAACToken.burn function calls _transfer to send taxAmount to feeCollector. However, _transfer invokes _update (override), which applies taxation again, for example it burns 0.5% taxedAmount.

​
function burn(uint256 amount) external {
uint256 taxAmount = amount.percentMul(burnTaxRate);
_burn(msg.sender, amount - taxAmount);
if (taxAmount > 0 && feeCollector != address(0)) {
_transfer(msg.sender, feeCollector, taxAmount);
}
}
function _update(
address from,
address to,
uint256 amount
) internal virtual override {
uint256 baseTax = swapTaxRate + burnTaxRate;
// Skip tax for whitelisted addresses or when fee collector disabled
if (baseTax == 0 || from == address(0) || to == address(0) || whitelistAddress[from] || whitelistAddress[to] || feeCollector == address(0)) {
super._update(from, to, amount);
return;
}
​
// All other cases where tax is applied
uint256 totalTax = amount.percentMul(baseTax);
uint256 burnAmount = totalTax * burnTaxRate / baseTax;
super._update(from, feeCollector, totalTax - burnAmount);
super._update(from, address(0), burnAmount);
super._update(from, to, amount - totalTax);
}

This results in double taxations, reducing the amount that should be sent to the feeCollector

Impact

feeCollector does not get all intended burn taxes - > fund loss

Tools

vscode

Recommendations

To transfer the burn tax, instead of calling _transfer, call super._update(from, feeCollector, taxAmount); to directly update the token balances without applying the taxes again

Updates

Lead Judging Commences

inallhonesty Lead Judge about 1 month ago
Submission Judgement Published
Validated
Assigned finding tags:

RAACToken::burn applies burn tax twice when transferring to feeCollector, causing excess tokens to be burned and reduced fees to be collected

This is by design, sponsor's words: Yes, burnt amount, done by whitelisted contract or not always occur the tax. The feeCollector is intended to always be whitelisted and the address(0) is included in the _transfer as a bypass of the tax amount, so upon burn->_burn->_update it would have not applied (and would also do another burn...). For this reason, to always apply such tax, the burn function include the calculation (the 2 lines that applies) and a direct transfer to feeCollector a little bit later. This is done purposefully

inallhonesty Lead Judge about 1 month ago
Submission Judgement Published
Validated
Assigned finding tags:

RAACToken::burn applies burn tax twice when transferring to feeCollector, causing excess tokens to be burned and reduced fees to be collected

This is by design, sponsor's words: Yes, burnt amount, done by whitelisted contract or not always occur the tax. The feeCollector is intended to always be whitelisted and the address(0) is included in the _transfer as a bypass of the tax amount, so upon burn->_burn->_update it would have not applied (and would also do another burn...). For this reason, to always apply such tax, the burn function include the calculation (the 2 lines that applies) and a direct transfer to feeCollector a little bit later. This is done purposefully

Appeal created

inallhonesty Lead Judge 24 days ago
Submission Judgement Published
Invalidated
Reason: Non-acceptable severity
Assigned finding tags:

RAACToken::burn applies burn tax twice when transferring to feeCollector, causing excess tokens to be burned and reduced fees to be collected

This is by design, sponsor's words: Yes, burnt amount, done by whitelisted contract or not always occur the tax. The feeCollector is intended to always be whitelisted and the address(0) is included in the _transfer as a bypass of the tax amount, so upon burn->_burn->_update it would have not applied (and would also do another burn...). For this reason, to always apply such tax, the burn function include the calculation (the 2 lines that applies) and a direct transfer to feeCollector a little bit later. This is done purposefully

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