Prepared by:
HALBORN
Last Updated 09/20/2024
Date of Engagement by: August 26th, 2024 - September 10th, 2024
100% of all REPORTED Findings have been addressed
All findings
3
Critical
1
High
1
Medium
1
Low
0
Informational
0
Reserve Labs engaged Halborn to conduct a security assessment on their lending project, beginning on August 26, 2024, and ending on September 10, 2024. The security assessment was scoped to cover their swaylend-monorepo GitHub repository, located at https://github.com/Swaylend/swaylend-monorepo with commit ID 5d7b294035c14e62980c2bdabf9ac51d394235c0.
The team at Halborn was provided two weeks for the engagement and assigned one full-time security engineer to assess the security of the smart contracts. The security engineer is a blockchain and smart-contract security expert with advanced penetration testing, smart-contract hacking, and deep knowledge of multiple blockchain protocols.
The purpose of this assessment is to achieve the following:
Ensure that the system operates as intended.
Identify potential security issues.
Identify lack of best practices within the codebase.
Identify systematic risks that may pose a threat in future releases.
In summary, Halborn identified some security issues that were successfully addressed by the Reserve Labs team.
Halborn performed a combination of manual and automated security testing to balance efficiency, timeliness, practicality, and accuracy in regard to the scope of this assessment. While manual testing is recommended to uncover flaws in logic, process, and implementation; automated testing techniques help enhance coverage of the code and can quickly identify items that do not follow the security best practices. The following phases and associated tools were used during the assessment:
Research into architecture and purpose.
Manual code review and walkthrough.
Manual testing by custom scripts.
Critical
1
High
1
Medium
1
Low
0
Informational
0
Impact x Likelihood
HAL-01
HAL-05
HAL-03
| Security analysis | Risk level | Remediation Date |
|---|---|---|
| Missing funds validation in update_price_feeds | Critical | Solved - 09/13/2024 |
| Missing staleness checks in oracle queries | High | Solved - 09/13/2024 |
| Missing price feed validation | Medium | Solved - 09/13/2024 |
// Critical
The function update_price_feeds is responsible of updating the Pyth oracle by paying a given fee and pushing the most recent price (as Pyth oracles follow a push-like behavior where users are the ones which update the price feed at will). However, it is not checked that the funds sent by the user are indeed the passed update_fee, so such amount is retrieved from the internal balances of the market (which is a loss of funds for depositors).
The function update_price_feeds is responsible of updating the Pyth price feed from within the market contract. However, Pyth oracles need a fee being paid upfront, as seen in
#[storage(read, write), payable]
fn update_price_feeds(update_data: Vec<Bytes>) {
require(
msg_asset_id() == AssetId::base(),
PythError::FeesCanOnlyBePaidInTheBaseAsset,
);
...
let required_fee = total_fee(total_number_of_updates, storage.single_update_fee);
require(msg_amount() >= required_fee, PythError::InsufficientFee);
...
}For that, the function update_price_feeds and its internal version calls update_price_feeds in the oracle endpoint and passes as fee update_fee. However, it does not check that the msg.value is equal to update_fee, so it is possible to update the price feeds by sending funds from the market balance instead of the caller assets.
#[payable, storage(read)]
fn update_price_feeds_internal(update_fee: u64, update_data: Vec<Bytes>) {
let contract_id = storage.pyth_contract_id.read();
require(contract_id != ZERO_B256, Error::OracleContractIdNotSet);
let oracle = abi(PythCore, contract_id);
oracle.update_price_feeds {
asset_id: FUEL_ETH_BASE_ASSET_ID, coins: update_fee
} // @audit not checked update_fee == msg.value
(update_data);
}Require that the passed value is equal to the update_fee argument to avoid using market's funds.
SOLVED: The code now checks for the passed amount to be higher or equal than update_fee and the token passed is ETH.
// High
When using third-party oracles, it is recommended to check the timestamp of a price feed against a staleness factor to avoid using a stale price that did not reflect the real value of the underlying asset. However, this is not done in the lending market in scope, which triggers serious issues as stated in the next section.
In Fuel, Pyth price feeds follow the next structure:
pub struct Price {
// Confidence interval around the price
pub confidence: u64,
// Price exponent
// This value represents the absolute value of an i32 in the range -255 to 0. Values other than 0, should be considered negative:
// exponent of 5 means the Pyth Price exponent was -5
pub exponent: u32,
// Price
pub price: u64,
// The TAI64 timestamp describing when the price was published
pub publish_time: u64,
}to check the staleness of the price feed, the protocol using it must check for publish_time to not be too far in the past. However, it is not done in get_price_internal:
// # 10. Pyth Oracle management
#[storage(read)]
fn get_price_internal(price_feed_id: PriceFeedId) -> Price {
let contract_id = storage.pyth_contract_id.read();
require(contract_id != ZERO_B256, Error::OracleContractIdNotSet);
let oracle = abi(PythCore, contract_id);
let price = oracle.price(price_feed_id);
price
}As Pyth oracles follow a push behavior, where the price feed is not updated until a third actor updates it, then it is possible for users to "game" the market by interacting with it where the Pyth oracle returns a favorable price that does not reflect the real value of the asset, update it, and then gain advantage of it by interacting again /for example, borrowing more assets than the real value of its collateral.
Check publish_time to not be too far in the past against a staleness factor.
SOLVED: The code now checks for the price publish time to not be too far in the future nor in the past.
// Medium
The get_price_internal function does not perform input validation on the price, confidence, and exponent values returned from the called price feed, which can lead to the contract accepting invalid or untrusted prices. Those values should be checked as clearly stated in the official documentation.
The function is as follows:
// # 10. Pyth Oracle management
#[storage(read)]
fn get_price_internal(price_feed_id: PriceFeedId) -> Price {
let contract_id = storage.pyth_contract_id.read();
require(contract_id != ZERO_B256, Error::OracleContractIdNotSet);
let oracle = abi(PythCore, contract_id);
let price = oracle.price(price_feed_id);
price
}which can be seen does not perform any type of input validation.
The function should revert the transaction if one of the following conditions is triggered:
price == 0
confidence > 0 && (price / confidence) < MIN_CONF_RATIO for a given MIN_CONF_RATIO
SOLVED: The recommended checks are now done in function get_price_internal.
Halborn strongly recommends conducting a follow-up assessment of the project either within six months or immediately following any material changes to the codebase, whichever comes first. This approach is crucial for maintaining the project’s integrity and addressing potential vulnerabilities introduced by code modifications.
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