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

Protocol loses burn tax in burn() due to _update() in RAACToken

newspacexyz

Summary

In RAACToken, the burn() manually transfers the taxAmount to the feeCollector, but this tax is already deducted inside _update() during the _transfer() call. As a result, users pay the burn tax twice:

  1. First deduction in burn() before _update() executes.

  2. Second deduction in _update() due to tax logic.

Vulnerability Details

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);
}

burn(msg.sender, amount - taxAmount); → Reduces amount - taxAmount from user balance. At this time, burnTaxAmount is included and feeCollector should receive taxAmount.

_transfer(msg.sender, feeCollector, taxAmount); → Triggers _update(), which applies tax logic again.

_update() automatically applies swapTaxRate + burnTaxRate if msg.sender is not in whitelist. As a result, feeCollector couldn't receive burnAmount.

Impact

Protocol loses burnTaxAmount of burnTaxAmount in burn().

Tools Used

manual

Recommendations

Adds validation of to == feeCollector in _update()

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)) {
+ if (baseTax == 0 || from == address(0) || to == address(0) || whitelistAddress[from] || whitelistAddress[to] || feeCollector == address(0)
+ || to == feeCollector) {
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);
}
Updates

Lead Judging Commences

inallhonesty Lead Judge 7 months 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 7 months 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 6 months 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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