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

Invalid fee share process and distribution leads to loss of funds.

0xsandy

Summary

Fee shares are distributed incorrectly for Buy/Sell Swap Tax and NFT Royalty Fees types which leads to loss of funds.

Vulnerability Details

Fee shares are distributed incorrectly for Buy/Sell Swap Tax and NFT Royalty Fees in the _initializeFeeTypes() function of FeeCollector.sol.

// Buy/Sell Swap Tax (2% total)
feeTypes[6] = FeeType({
veRAACShare: 500, // 0.5%
burnShare: 500, // 0.5%
repairShare: 1000, // 1.0%
treasuryShare: 0
});
// NFT Royalty Fees (2% total)
feeTypes[7] = FeeType({
veRAACShare: 500, // 0.5%
burnShare: 0,
repairShare: 1000, // 1.0%
treasuryShare: 500 // 0.5%
});

Here, in BPS, 500 is equal to 5% not 0.5% and 1000 is equal to 10% not 1%. Thus it is incorrectly initialized.

Impact

These above share types are used for fee calculation and distribution and for Buy/Sell Swap Tax and NFT Royalty Fees fee types, more amount of shares will be distributed, burned, transferred to repair fund or treasury than intended.

Shares are calculated for distribution here:

function _calculateDistribution(uint256 totalFees) internal view returns (uint256[4] memory shares) {
uint256 totalCollected;
​
for (uint8 i = 0; i < 8; i++) {
uint256 feeAmount = _getFeeAmountByType(i);
if (feeAmount == 0) continue;
​
FeeType memory feeType = feeTypes[i];
totalCollected += feeAmount;
uint256 weight = (feeAmount * BASIS_POINTS) / totalFees;
shares[0] += (weight * feeType.veRAACShare) / BASIS_POINTS;
shares[1] += (weight * feeType.burnShare) / BASIS_POINTS;
shares[2] += (weight * feeType.repairShare) / BASIS_POINTS;
shares[3] += (weight * feeType.treasuryShare) / BASIS_POINTS;
}
​
if (totalCollected != totalFees) revert InvalidFeeAmount();
​
shares[0] = (totalFees * shares[0]) / BASIS_POINTS;
shares[1] = (totalFees * shares[1]) / BASIS_POINTS;
shares[2] = (totalFees * shares[2]) / BASIS_POINTS;
shares[3] = (totalFees * shares[3]) / BASIS_POINTS;
​
uint256 remainder = totalFees - (shares[0] + shares[1] + shares[2] + shares[3]);
if (remainder > 0) shares[3] += remainder;
}

And the distribution is processed here:

function _processDistributions(uint256 totalFees, uint256[4] memory shares) internal {
uint256 contractBalance = raacToken.balanceOf(address(this));
if (contractBalance < totalFees) revert InsufficientBalance();
​
if (shares[0] > 0) {
uint256 totalVeRAACSupply = veRAACToken.getTotalVotingPower();
if (totalVeRAACSupply > 0) {
TimeWeightedAverage.createPeriod(
distributionPeriod,
block.timestamp + 1,
7 days,
shares[0],
totalVeRAACSupply
);
totalDistributed += shares[0];
} else {
shares[3] += shares[0]; // Add to treasury if no veRAAC holders
}
}
​
if (shares[1] > 0) raacToken.burn(shares[1]);
if (shares[2] > 0) raacToken.safeTransfer(repairFund, shares[2]);
if (shares[3] > 0) raacToken.safeTransfer(treasury, shares[3]);
}

Due to this issue, more amount of fees will be distributed and less amount is sent to treasury than intended as:

uint256 remainder = totalFees - (shares[0] + shares[1] + shares[2] + shares[3]);
if (remainder > 0) shares[3] += remainder;
if (shares[3] > 0) raacToken.safeTransfer(treasury, shares[3]);

As remaining fees with fee types not having 100% bps distribution is sent back to the treasury. Thus, loss of funds for the protocol and high severity.

Tools Used

Manual Analysis

Recommendations

Change 500 to 50 i.e 0.5% and 1000 to 100 i.e 1% for accurate shares calculation.

Updates

Lead Judging Commences

inallhonesty Lead Judge 7 months ago
Submission Judgement Published
Validated
Assigned finding tags:

Fee shares for fee type 6 and 7 inside FeeCollector do not total up to the expected 10000 basis points, this leads to update problems, moreover they are 10x the specifications

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