Missing slippage/min-return check in the UniswapHandler contract

[code423n4]

Handle

defsec

Vulnerability details

Impact

Trades can happen at a bad price and lead to receiving fewer tokens than at a fair market price.
The attacker's profit is the protocol's loss.

Proof of Concept

The contracts are missing slippage checks which can lead to being vulnerable to sandwich attacks.

A common attack in DeFi is the sandwich attack. Upon observing a trade of asset X for asset Y, an attacker frontruns the victim trade by also buying asset Y, lets the victim execute the trade, and then backruns (executes after) the victim by trading back the amount gained in the first trade. Intuitively, one uses the knowledge that someone’s going to buy an asset, and that this trade will increase its price, to make a profit. The attacker’s plan is to buy this asset cheap, let the victim buy at an increased price, and then sell the received amount again at a higher price afterwards.

See UniswapHandler.buyMalt and sellMalt functions:

https://github.com/code-423n4/2021-11-malt/blob/d3f6a57ba6694b47389b16d9d0a36a956c5e6a94/src/contracts/DexHandlers/UniswapHandler.sol#L148
https://github.com/code-423n4/2021-11-malt/blob/d3f6a57ba6694b47389b16d9d0a36a956c5e6a94/src/contracts/DexHandlers/UniswapHandler.sol#L173

    router.swapExactTokensForTokens(
      rewardBalance,
      0, // amountOutMin
      path,
      address(this),
      now
    );

Tools Used

None

Recommended Mitigation Steps

Add minimum return amount checks.
Accept a function parameter that can be chosen by the transaction sender, then check that the actually received amount is above this parameter.

Alternatively, check if it's feasible to send these transactions directly to a miner such that they are not visible in the public mempool.

[0xScotch]

#219

[GalloDaSballo]

Duplicate of #219