InsuranceFund depositors can be priced out & deposits can be stolen

[code423n4]

Lines of code

https://github.com/code-423n4/2022-02-hubble/blob/8c157f519bc32e552f8cc832ecc75dc381faa91e/contracts/InsuranceFund.sol#L44-L54

Vulnerability details

Impact

The InsuranceFund.deposit function mints initial shares equal to the deposited amount.
The deposit / withdraw functions also use the VUSD contract balance for the shares computation. (balance() = vusd.balanceOf(address(this)))

It's possible to increase the share price to very high amounts and price out smaller depositors.

POC

• deposit(_amount = 1): Deposit the smallest unit of VUSD as the first depositor. Mint 1 share and set the total supply and VUSD balance to 1.
• Perform a direct transfer of 1000.0 VUSD to the InsuranceFund. The balance() is now 1000e6 + 1
• Doing any deposits of less than 1000.0 VUSD will mint zero shares: shares = _amount * _totalSupply / _pool = 1000e6 * 1 / (1000e6 + 1) = 0.
• The attacker can call withdraw(1) to burn their single share and receive the entire pool balance, making a profit. (balance() * _shares / totalSupply() = balance())

I give this a high severity as the same concept can be used to always steal the initial insurance fund deposit by frontrunning it and doing the above-mentioned steps, just sending the frontrunned deposit amount to the contract instead of the fixed 1000.0.
They can then even repeat the steps to always frontrun and steal any deposits.

Recommended Mitigation Steps

The way UniswapV2 prevents this is by requiring a minimum deposit amount and sending 1000 initial shares to the zero address to make this attack more expensive.
The same mitigation can be done here.

[atvanguard]

Duplicate of #116