QA Report

[code423n4]

C4-001 : Safe Approve Function Is Deprecated

Impact

On the LibAsset contract, It has been observed that to safeIncreaseAllowance and safeDecreaseAllowance are defined however they are not used. On the other hand (OpenZeppelin/openzeppelin-contracts#2268) safeApprove function is deprecated.

Proof of Concept

1. In the swap functions, approveERC20 function has been used.
2. Navigate to the following contract.

https://github.com/code-423n4/2022-03-lifinance/blob/main/src/Libraries/LibAsset.sol#L67

Tools Used

Code Review

Recommended Mitigation Steps

Consider to enable functions and use safeIncreaseAllowance and safeDecreaseAllowance instead of safeApprove.

C4-002 : Incompatibility With Rebasing/Deflationary/Inflationary tokens

Impact - LOW

LiFinance protocol do not appear to support rebasing/deflationary/inflationary tokens whose balance changes during transfers or over time. The necessary checks include at least verifying the amount of tokens transferred to contracts before and after the actual transfer to infer any fees/interest.

Proof of Concept

1. Navigate to the following contract.

https://github.com/code-423n4/2022-03-lifinance/blob/main/src/Libraries/LibAsset.sol#L84

Tools Used

Manual Code Review

Recommended Mitigation Steps

• Ensure that to check previous balance/after balance equals to amount for any rebasing/inflation/deflation
• Add support in contracts for such tokens before accepting user-supplied tokens
• Consider supporting deflationary / rebasing / etc tokens by extra checking the balances before/after or strictly inform your users not to use such tokens if they don't want to lose them.

C4-003 : Missing zero-address check in constructors and the setter functions

Impact - LOW

Missing checks for zero-addresses may lead to infunctional protocol, if the variable addresses are updated incorrectly.

Proof of Concept

1. Navigate to the following all contract functions.

https://github.com/code-423n4/2022-03-lifinance/blob/main/src/LiFiDiamond.sol#L8

Tools Used

Code Review

Recommended Mitigation Steps

Consider adding zero-address checks in the discussed constructors:
require(newAddr != address(0));.

C4-004 : transferOwnership should be two step process

Impact - LOW

The current ownership transfer process involves the current owner calling Unlock.transferOwnership(). This function checks the new owner is not the zero address and proceeds to write the new owner's address into the owner's state variable. If the nominated EOA account is not a valid account, it is entirely possible the owner may accidentally transfer ownership to an uncontrolled account, breaking all functions with the onlyOwner() modifier. Lack of two-step procedure for critical operations leaves them error-prone
if the address is incorrect, the new address will take on the functionality of the new role immediately

for Ex : -Alice deploys a new version of the whitehack group address. When she invokes the whitehack group address setter to replace the address, she accidentally enters the wrong address. The new address now has access to the role immediately and is too late to revert

Proof of Concept

1. Navigate to "https://github.com/code-423n4/2022-03-lifinance/blob/main/src/Facets/OwnershipFacet.sol#L8".
2. The contracts have many onlyOwner function.
3. The contract is inherited from the Ownable which includes transferOwnership.

Tools Used

None

Recommended Mitigation Steps

Implement zero address check and Consider implementing a two step process where the owner nominates an account and the nominated account needs to call an acceptOwnership() function for the transfer of ownership to fully succeed. This ensures the nominated EOA account is a valid and active account.

C4-005 : Front-runnable Initializers

Impact - LOW

All contract initializers were missing access controls, allowing any user to initialize the contract. By front-running the contract deployers to initialize the contract, the incorrect parameters may be supplied, leaving the contract needing to be redeployed.

Proof of Concept

1. Navigate to the following contracts.

https://github.com/code-423n4/2022-03-prepo/blob/d62d7146b27fd39a5f1358ffde08766724886cf5/contracts/core/Collateral.sol#L38

2. initialize functions does not have access control. They are vulnerable to front-running.

Tools Used

Manual Code Review

Recommended Mitigation Steps

While the code that can be run in contract constructors is limited, setting the owner in the contract's constructor to the msg.sender and adding the onlyOwner modifier to all initializers would be a sufficient level of access control.

C4-006 : Consider making contracts Pausable

Impact - LOW

There are many external risks so my suggestion is that you should consider making the contracts pausable, so in case of an unexpected event, the admin can pause transfers.

Tools Used

Code Review

Recommended Mitigation Steps

Consider making contracts Pausable https://github.com/OpenZeppelin/openzeppelin-contracts/blob/master/contracts/security/Pausable.sol.

C4-007 : Critical changes should use two-step procedure

Impact - NON CRITICAL

The critical procedures should be two step process.

Proof of Concept

1. Navigate to the following contract.

https://github.com/code-423n4/2022-03-lifinance/blob/main/src/Libraries/LibDiamond.sol#L101

Tools Used

Code Review

Recommended Mitigation Steps

Lack of two-step procedure for critical operations leaves them error-prone. Consider adding two step procedure on the critical functions.

C4-008 : # DoS With Block Gas Limit

Impact - Non-Critical

When smart contracts are deployed or functions inside them are called, the execution of these actions always requires a certain amount of gas, based of how much computation is needed to complete them. The Ethereum network specifies a block gas limit and the sum of all transactions included in a block can not exceed the threshold.

Programming patterns that are harmless in centralized applications can lead to Denial of Service conditions in smart contracts when the cost of executing a function exceeds the block gas limit. Modifying an array of unknown size, that increases in size over time, can lead to such a Denial of Service condition.

Proof of Concept

1. Follow the functions shown below.

https://github.com/code-423n4/2022-03-lifinance/blob/main/src/Libraries/LibDiamond.sol#L116

https://github.com/code-423n4/2022-03-lifinance/blob/main/src/Libraries/LibDiamond.sol#L110

https://github.com/code-423n4/2022-03-lifinance/blob/main/src/Libraries/LibDiamond.sol#L125

https://github.com/code-423n4/2022-03-lifinance/blob/main/src/Facets/Swapper.sol#L14

https://github.com/code-423n4/2022-03-lifinance/blob/main/src/Facets/DiamondLoupeFacet.sol#L24

Tools Used

Code Review

Recommended Mitigation Steps

Caution is advised when you expect to have large arrays that grow over time. Actions that require looping across the entire data structure should be avoided.

If you absolutely must loop over an array of unknown size, then you should plan for it to potentially take multiple blocks, and therefore require multiple transactions.

C4-009 : # Missing Re-entrancy Guard

Impact

The re-entrancy guard is missing on the Eth anchor interaction. The external router interaction can cause to the re-entrancy vulnerability.

Proof of Concept

1. Navigate to the following contract.

https://github.com/code-423n4/2022-03-lifinance/blob/main/src/Libraries/LibSwap.sol#L42

https://github.com/code-423n4/2022-03-lifinance/blob/main/src/Facets/GenericSwapFacet.sol#L30

https://github.com/code-423n4/2022-03-lifinance/blob/main/src/Facets/NXTPFacet.sol#L137

Tools Used

Code Review

Recommended Mitigation Steps

Follow the check effect interaction pattern or put re-entrancy guard.

[H3xept]

Re Use of deprecated safeApprove()

Duplicate of #82

[H3xept]

Re step ownership transfer

Duplicate of #143

[H3xept]

Re reentrancy

Duplicate of #109