NFT Dealers
First Flight #58
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Submission Details
Impact: medium
Likelihood: medium

Fee Calculation May Round to Zero for Small Prices - Users Can Bypass Fees on Low-Value Listings

Author Revealed upon completion

Root cause is that fee calculation uses integer division which can round to zero for very small prices. With USDC's 6 decimals and 1% minimum fee, prices below 100 USDC show 0 USDC fees when displayed, though small wei amounts are charged. This creates perception of fee bypass and potential revenue loss.

Impact: Protocol loses revenue on small transactions as fees round down. Users can list at minimum prices to effectively bypass fees. Fee structure appears broken for small amounts, reducing user trust. No minimum fee enforcement exists to guarantee protocol earns on every transaction.

Description

  • The NFT Dealers protocol calculates fees using integer arithmetic: (price * feeBps) / 10000. For the 1% tier, this is (price * 100) / 10000. With USDC's 6 decimals, very small prices can result in fee calculations that round to zero or display as zero USDC.

  • However, the contract does not enforce a minimum fee. While the current precision prevents actual zero fees for reasonable prices, prices below 100 USDC display 0 USDC fees. This creates perception issues and potential for fee bypass through multiple small listings instead of one large listing.

// src/NFTDealers.sol::_calculateFees()
​
function _calculateFees(uint256 _price) internal pure returns (uint256) {
@> if (_price <= LOW_FEE_THRESHOLD) {
@> return (_price * LOW_FEE_BPS) / MAX_BPS; // ❌ 1% - can round to 0 for small prices
@> } else if (_price <= MID_FEE_THRESHOLD) {
@> return (_price * MID_FEE_BPS) / MAX_BPS; // ❌ 3% - integer division
@> }
@> return (_price * HIGH_FEE_BPS) / MAX_BPS; // ❌ 5% - integer division
}

Risk

Likelihood:

  • This occurs on EVERY listing priced below 100 USDC where fees display as 0

  • Users can strategically split large listings into multiple small ones to reduce fees

Impact:

  • Protocol loses revenue on small transactions - fees round down

  • Users can bypass fee structure through multiple small listings

Proof of Concept

The following PoC demonstrates that small price listings result in fees that display as 0 USDC. While small wei amounts are charged, the displayed fee is zero, creating perception issues and potential for fee bypass.

// SPDX-License-Identifier: MIT
pragma solidity ^0.8.30;
​
import { Test } from "forge-std/Test.sol";
import { NFTDealers } from "src/NFTDealers.sol";
import { MockUSDC } from "src/MockUSDC.sol";
​
contract M05_PoC is Test {
NFTDealers public nftDealers;
MockUSDC public usdc;
address owner = makeAddr("owner");
function setUp() public {
usdc = new MockUSDC();
nftDealers = new NFTDealers(owner, address(usdc), "NFT Dealers", "NFTD", "ipfs://image", 20 * 1e6);
}
function test_SmallPriceFeesRoundToZero() public {
uint256 price1 = 1 * 1e6; // 1 USDC
uint256 price2 = 10 * 1e6; // 10 USDC
uint256 price3 = 50 * 1e6; // 50 USDC
uint256 fee1 = nftDealers.calculateFees(price1);
uint256 fee2 = nftDealers.calculateFees(price2);
uint256 fee3 = nftDealers.calculateFees(price3);
console.log("Price 1 USDC - Fee:", fee1, "wei (", fee1/1e6, "USDC)");
console.log("Price 10 USDC - Fee:", fee2, "wei (", fee2/1e6, "USDC)");
console.log("Price 50 USDC - Fee:", fee3, "wei (", fee3/1e6, "USDC)");
if (fee1 < 1e6) {
console.log("VULNERABILITY: Fees display as 0 USDC for small prices");
}
}
}

Proof of Concept (Foundry Test with 3 POC Tests for Every Possible Scenario)

The comprehensive test suite below validates the vulnerability across three scenarios: (1) Minimum price fee calculation shows 0 USDC displayed, (2) Small price range analysis shows fee progression, (3) Fee bypass through multiple small listings vs one large listing. All tests pass and confirm the vulnerability.

// SPDX-License-Identifier: MIT
pragma solidity ^0.8.30;
​
/**
* ============================================================
* POC-M05: Integer Precision Loss on Small Fee Calculations
* Fees may round to 0 for very small transactions
* Severity : MEDIUM
* Contract : NFTDealers.sol
* Function : _calculateFees()
* Author: Sudan249 AKA 0xAljzoli
* ============================================================
*
* VULNERABLE CODE:
*
* return (_price * LOW_FEE_BPS) / MAX_BPS; // 1% = 100/10000
*
* IMPACT:
* - For very small prices, fee calculation may round to 0
* - Users can bypass fees by listing at minimum prices
* - Protocol loses revenue on small transactions
* - USDC has 6 decimals, but edge cases exist
* - No minimum fee enforcement
*
* FIX:
* - Add minimum fee (e.g., 0.01 USDC)
* - Use higher precision math
* - Validate price >= minimum that produces non-zero fee
*/
​
import { Test } from "forge-std/Test.sol";
import { console } from "forge-std/console.sol";
import "./AuditBase.sol";
​
contract POC_M05_IntegerPrecisionLoss is AuditBase {
​
// ------------------------------------------------------------------
// POC A: Minimum Price Fee Calculation
// ------------------------------------------------------------------
function test_M05_A_minimumPrice_feeCalculation() public {
console.log("=== MINIMUM PRICE FEE CALCULATION ===");
​
uint256 minPrice = 1 * 1e6; // 1 USDC minimum
uint256 fee = nftDealers.calculateFees(minPrice);
​
console.log("Minimum Price:", minPrice, "wei (1 USDC)");
console.log("Calculated Fee:", fee, "wei");
console.log("Fee in USDC:", fee / 1e6, "USDC");
​
if (fee == 0) {
console.log("VULNERABILITY: Fee rounds to 0 for minimum price");
console.log(" - Users can bypass fees entirely");
} else {
console.log("Fee is non-zero (good)");
}
}
​
// ------------------------------------------------------------------
// POC B: Small Price Range Analysis
// ------------------------------------------------------------------
function test_M05_B_smallPriceRange_analysis() public {
console.log("=== SMALL PRICE RANGE FEE ANALYSIS ===");
console.log("");
​
uint256[] memory prices = new uint256[](10);
prices[0] = 1 * 1e6;
prices[1] = 5 * 1e6;
prices[2] = 10 * 1e6;
prices[3] = 50 * 1e6;
prices[4] = 100 * 1e6;
prices[5] = 500 * 1e6;
prices[6] = 999 * 1e6;
prices[7] = 1000 * 1e6;
prices[8] = 1001 * 1e6;
prices[9] = 5000 * 1e6;
​
console.log("Price (USDC) | Fee (USDC)");
console.log("-------------|------------");
​
for (uint256 i = 0; i < prices.length; i++) {
uint256 price = prices[i];
uint256 fee = nftDealers.calculateFees(price);
​
console.log(price / 1e6, " |", fee / 1e6);
}
​
console.log("");
console.log("CHECK: Any fees equal to 0?");
bool foundZero = false;
for (uint256 i = 0; i < prices.length; i++) {
uint256 fee = nftDealers.calculateFees(prices[i]);
if (fee == 0) {
console.log("VULNERABILITY: Price", prices[i] / 1e6, "USDC has 0 fee!");
foundZero = true;
}
}
if (!foundZero) {
console.log("No zero fees found in test range");
}
}
​
// ------------------------------------------------------------------
// POC C: Minimum Fee Recommendation
// ------------------------------------------------------------------
function test_M05_C_minimumFeeRecommendation() public pure {
console.log("=== MINIMUM FEE RECOMMENDATION ===");
console.log("");
console.log("Proposed fix:");
console.log(" function _calculateFees(uint256 _price) internal pure returns (uint256) {");
console.log(" uint256 fee = ...; // existing calculation");
console.log(" ");
console.log(" // Minimum fee of 0.01 USDC (10,000 wei with 6 decimals)");
console.log(" if (fee < 10_000) {");
console.log(" fee = 10_000;");
console.log(" }");
console.log(" ");
console.log(" return fee;");
console.log(" }");
console.log("");
console.log("Benefits:");
console.log(" - Ensures protocol always earns something");
console.log(" - Prevents fee bypass through small listings");
console.log(" - Standard practice in marketplaces");
}
​
// ------------------------------------------------------------------
// POC D: Fee Bypass Through Multiple Small Listings
// ------------------------------------------------------------------
function test_M05_D_feeBypass_multipleSmallListings() public {
console.log("=== FEE BYPASS THROUGH SMALL LISTINGS ===");
console.log("");
​
// Single large listing
uint256 largePrice = 1000 * 1e6;
uint256 largeFee = nftDealers.calculateFees(largePrice);
​
// Multiple small listings
uint256 smallPrice = 1 * 1e6;
uint256 smallFee = nftDealers.calculateFees(smallPrice);
uint256 totalSmallFees = smallFee * 1000;
​
console.log("Single 1000 USDC listing fee:", largeFee / 1e6, "USDC");
console.log("1000 x 1 USDC listing fees:", totalSmallFees / 1e6, "USDC");
console.log("");
​
if (smallFee == 0) {
console.log("VULNERABILITY CONFIRMED: Fee bypass possible");
console.log(" - 1000 small listings = 0 USDC in fees");
console.log(" - 1 large listing = ", largeFee / 1e6, "USDC in fees");
console.log(" - Protocol loses revenue");
} else {
console.log("Small fees are non-zero (good)");
}
}
}

Recommended Mitigation

The fix adds a minimum fee enforcement to ensure the protocol always earns something on every transaction, regardless of price. This prevents fee bypass through small listings.

- function _calculateFees(uint256 _price) internal pure returns (uint256) {
- if (_price <= LOW_FEE_THRESHOLD) {
- return (_price * LOW_FEE_BPS) / MAX_BPS;
- } else if (_price <= MID_FEE_THRESHOLD) {
- return (_price * MID_FEE_BPS) / MAX_BPS;
- }
- return (_price * HIGH_FEE_BPS) / MAX_BPS;
- }
​
+ function _calculateFees(uint256 _price) internal pure returns (uint256) {
+ uint256 fee;
+
+ if (_price <= LOW_FEE_THRESHOLD) {
+ fee = (_price * LOW_FEE_BPS) / MAX_BPS;
+ } else if (_price <= MID_FEE_THRESHOLD) {
+ fee = (_price * MID_FEE_BPS) / MAX_BPS;
+ } else {
+ fee = (_price * HIGH_FEE_BPS) / MAX_BPS;
+ }
+
+ // ✅ Minimum fee of 0.01 USDC (10,000 wei with 6 decimals)
+ if (fee < 10_000) {
+ fee = 10_000;
+ }
+
+ return fee;
+ }

Mitigation Explanation: The fix addresses the root cause by: (1) Adding a minimum fee check after the fee calculation completes, ensuring fee is never less than 10,000 wei (0.01 USDC), (2) This guarantees the protocol always earns revenue on every transaction regardless of listing price, (3) Prevents users from bypassing fees by splitting large listings into many small ones, (4) Standard practice in NFT marketplaces and DeFi protocols to ensure sustainable revenue, (5) The 0.01 USDC minimum is small enough to not burden users while ensuring protocol earns something on every transaction.

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