Hawk High

Summary

A critical vulnerability was identified in the graduateAndUpgrade function where USDC payments are processed after contract upgrades, risking incorrect fund distribution due to stale bursary values.

Vulnerability Details

Location:
graduateAndUpgrade(address _levelTwo, bytes memory) function

Technical Description:
The function currently performs:

1. Contract upgrade (_authorizeUpgrade)

2. USDC payments to teachers/principal

This order creates two risks:

1. Stale bursary Value: Payments use pre-upgrade bursary amount even if upgrade modifies it

2. Upgrade Failure: If upgrade reverts, payments may never execute despite meeting requirements

Attack Vectors:

• Malicious upgrade could front-run payment logic

• Upgrade could accidentally modify bursary before payments complete

Impact

Potential Consequences:

• Financial losses from incorrect payment amounts

• Fund locking if upgrade reduces bursary before payments

• Protocol insolvency if payments use inflated old values

• Loss of stakeholder trust

Worst Case Scenario:
An attacker could propose an upgrade that:

1. Reduces bursary by 90% during upgrade

2. Lets payments execute at old 100% rate

3. Steals the 90% difference

Tools Used

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