Thunder Loan

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

setAllowedToken(false) deletes the asset mapping while LPs still hold shares, permanently locking their funds

Root + Impact

Description:

When a liquidity provider (LP) deposits tokens, they receive AssetToken shares representing their claim on the pool. The owner has the ability to disallow tokens by calling setAllowedToken(token, false). This function entirely deletes the s_tokenToAssetToken[token] mapping. However, it does not check if there are existing deposits or outstanding shares. Because the redeem() function is protected by the revertIfNotAllowedToken modifier, any LP holding shares for a newly disallowed token will have their redemption attempts permanently revert. The funds remain trapped in the AssetToken contract with no mechanism for the LP to recover them.

// src/protocol/ThunderLoan.sol
} else {
AssetToken assetToken = s_tokenToAssetToken[token];
@> delete s_tokenToAssetToken[token];
emit AllowedTokenSet(token, assetToken, allowed);
return assetToken;
}

Risk

Likelihood: Medium. Requires the owner to disallow a token that currently has active deposits, which could happen due to a token migration, depeg event, or malicious admin action.

Impact: High. The LP's funds are permanently locked in the contract. There is no alternative withdrawal function, meaning the deposited tokens are unrecoverable.

Proof of Concept:

The PoC sets up an LP with a valid deposit, then simulates the owner calling setAllowedToken(token, false). It then verifies that the LP can no longer redeem their shares, as the call reverts, proving the funds are permanently locked.

contract PoC is Test {
function testExploit() public {
token.mint(lp, 1_000 ether);
vm.prank(lp); token.approve(address(tl), type(uint256).max);
vm.prank(lp); tl.deposit(token, 1_000 ether);
​
vm.prank(owner); tl.setAllowedToken(token, false);
​
vm.prank(lp);
vm.expectRevert();
tl.redeem(token, assetToken.balanceOf(lp));
}
}

Recommended Mitigation:

Prevent disallowing a token if there are outstanding deposits. Alternatively, allow redeem() to bypass the allowed check.

} else {
AssetToken assetToken = s_tokenToAssetToken[token];
+ require(IERC20(token).balanceOf(address(assetToken)) == 0, "Outstanding deposits");
delete s_tokenToAssetToken[token];
Updates

Lead Judging Commences

ai-first-flight-judge Lead Judge 15 days ago
Submission Judgement Published
Validated
Assigned finding tags:

[M-01] 'ThunderLoan::setAllowedToken' can permanently lock liquidity providers out from redeeming their tokens

## Description If the 'ThunderLoan::setAllowedToken' function is called with the intention of setting an allowed token to false and thus deleting the assetToken to token mapping; nobody would be able to redeem funds of that token in the 'ThunderLoan::redeem' function and thus have them locked away without access. ## Vulnerability Details If the owner sets an allowed token to false, this deletes the mapping of the asset token to that ERC20. If this is done, and a liquidity provider has already deposited ERC20 tokens of that type, then the liquidity provider will not be able to redeem them in the 'ThunderLoan::redeem' function. ```solidity function setAllowedToken(IERC20 token, bool allowed) external onlyOwner returns (AssetToken) { if (allowed) { if (address(s_tokenToAssetToken[token]) != address(0)) { revert ThunderLoan__AlreadyAllowed(); } string memory name = string.concat("ThunderLoan ", IERC20Metadata(address(token)).name()); string memory symbol = string.concat("tl", IERC20Metadata(address(token)).symbol()); AssetToken assetToken = new AssetToken(address(this), token, name, symbol); s_tokenToAssetToken[token] = assetToken; emit AllowedTokenSet(token, assetToken, allowed); return assetToken; } else { AssetToken assetToken = s_tokenToAssetToken[token]; @> delete s_tokenToAssetToken[token]; emit AllowedTokenSet(token, assetToken, allowed); return assetToken; } } ``` ```solidity function redeem( IERC20 token, uint256 amountOfAssetToken ) external revertIfZero(amountOfAssetToken) @> revertIfNotAllowedToken(token) { AssetToken assetToken = s_tokenToAssetToken[token]; uint256 exchangeRate = assetToken.getExchangeRate(); if (amountOfAssetToken == type(uint256).max) { amountOfAssetToken = assetToken.balanceOf(msg.sender); } uint256 amountUnderlying = (amountOfAssetToken * exchangeRate) / assetToken.EXCHANGE_RATE_PRECISION(); emit Redeemed(msg.sender, token, amountOfAssetToken, amountUnderlying); assetToken.burn(msg.sender, amountOfAssetToken); assetToken.transferUnderlyingTo(msg.sender, amountUnderlying); } ``` ## Impact The below test passes with a ThunderLoan\_\_NotAllowedToken error. Proving that a liquidity provider cannot redeem their deposited tokens if the setAllowedToken is set to false, Locking them out of their tokens. ```solidity function testCannotRedeemNonAllowedTokenAfterDepositingToken() public { vm.prank(thunderLoan.owner()); AssetToken assetToken = thunderLoan.setAllowedToken(tokenA, true); tokenA.mint(liquidityProvider, AMOUNT); vm.startPrank(liquidityProvider); tokenA.approve(address(thunderLoan), AMOUNT); thunderLoan.deposit(tokenA, AMOUNT); vm.stopPrank(); vm.prank(thunderLoan.owner()); thunderLoan.setAllowedToken(tokenA, false); vm.expectRevert(abi.encodeWithSelector(ThunderLoan.ThunderLoan__NotAllowedToken.selector, address(tokenA))); vm.startPrank(liquidityProvider); thunderLoan.redeem(tokenA, AMOUNT_LESS); vm.stopPrank(); } ``` ## Recommendations It would be suggested to add a check if that assetToken holds any balance of the ERC20, if so, then you cannot remove the mapping. ```diff function setAllowedToken(IERC20 token, bool allowed) external onlyOwner returns (AssetToken) { if (allowed) { if (address(s_tokenToAssetToken[token]) != address(0)) { revert ThunderLoan__AlreadyAllowed(); } string memory name = string.concat("ThunderLoan ", IERC20Metadata(address(token)).name()); string memory symbol = string.concat("tl", IERC20Metadata(address(token)).symbol()); AssetToken assetToken = new AssetToken(address(this), token, name, symbol); s_tokenToAssetToken[token] = assetToken; emit AllowedTokenSet(token, assetToken, allowed); return assetToken; } else { AssetToken assetToken = s_tokenToAssetToken[token]; + uint256 hasTokenBalance = IERC20(token).balanceOf(address(assetToken)); + if (hasTokenBalance == 0) { delete s_tokenToAssetToken[token]; emit AllowedTokenSet(token, assetToken, allowed); + } return assetToken; } } ```

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