Core Contracts

Summary

The smart contract’s response handling logic does not verify whether the data received from the oracle is non-empty or complete before attempting to decode it. Additionally, the decoded value (e.g., prime rate) is accepted without performing any sanity checks to ensure it falls within expected bounds. This lack of input validation may lead to erroneous state updates or cause the contract to revert unexpectedly when processing malformed or malicious oracle responses.

Vulnerability Details

• Empty/Incomplete Data Handling:
  In the function _processResponse, the oracle response is directly decoded using abi.decode(response, (uint256)) without checking if response contains data or meets the expected length. If the response is empty or incomplete, the decoding operation may fail, causing the contract to revert.

• Missing Sanity Checks:
  Once the data is decoded into a value (e.g., lastPrimeRate), no validation is performed to confirm that the value is reasonable (for example, ensuring the rate is greater than zero or within a predetermined range). This may allow an attacker or a faulty oracle to supply an out-of-bound or manipulated value, leading to potentially harmful behavior in downstream contracts that rely on this value (such as a lending pool).

Impact

• Malformed or empty data from the oracle will cause abi.decode to revert, potentially resulting in denial-of-service (DoS) if the oracle fails or is compromised.

• Without sanity checks, an incorrect prime rate (or similar critical value) may be stored and propagated, leading to inaccurate calculations in financial contracts such as lending pools. This can result in financial losses or market manipulation.

Tools Used

Manual

Recommendations

• Before decoding the response, check that the response byte array is not empty and meets the minimum length requirements expected for the data type (e.g., uint256).

• After decoding the oracle response, add validation logic to verify that the value is within an acceptable range. For example, ensure that the prime rate is positive and within a realistic upper bound.