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29047 - [SC - Insight] Reward is lost when totalSupply.md

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Reward is lost when totalSupply==0

Submitted on Mar 5th 2024 at 18:52:00 UTC by @DuckAstronomer for Boost | ZeroLend

Report ID: #29047

Report type: Smart Contract

Report severity: Insight

Target: https://github.com/zerolend/governance

Impacts:

  • Permanent freezing of unclaimed yield

Description

Vulnerability Details

Affected asset: governance-main/contracts/voter/gauge/RewardBase.sol

The notifyRewardAmount() function within the GaugeIncentiveController() contract (derived from RewardBase.sol) allows rewards to be sent and distributed to holders of AToken based on their eligibility determined by the EligibilityCriteria contract.

However, a crucial check is missing in the notifyRewardAmount() function. It fails to verify whether totalSupply == 0 before accepting the reward. This issue could result in the complete loss of the reward or a portion of it, which would then be locked in the GaugeIncentiveController() contract's balance indefinitely.

Consider the following scenario:

  1. Initially, there was a distribution of 10 ZeroLend rewards to GaugeIncentiveController().
  2. Subsequently, another 10 ZeroLend rewards were distributed after an hour.
  3. At this point, totalSupply equals 0.
  4. After 13 days, Alice mints 1 Atoken, now totalSupply > 0. She then waits an additional 14 days (as defined by the DURATION variable in RewardBase) and earns 1.4 ZeroLend.
  5. Consequently, a total of 18.6 ZeroLend becomes irreversibly locked in GaugeIncentiveController().

For the mitigation, add a check require(totalSupply > 0) to the notifyRewardAmount() of RewardBase.

Proof of Concept

To run the Poc put it's code to the governance-main/test/Gauge.poc.ts file, generate random private key, and issue the following command:

WALLET_PRIVATE_KEY=0x... NODE_ENV=test npx hardhat test test/Gauge.poc.ts --config hardhat.config.ts --network hardhat

import { expect } from "chai";
import { loadFixture } from "@nomicfoundation/hardhat-network-helpers";
import { SignerWithAddress } from "@nomicfoundation/hardhat-ethers/signers";
import {
  GaugeIncentiveController,
  OmnichainStaking,
  Pool,
  PoolVoter,
  StakingBonus,
  TestnetERC20,
  VestedZeroNFT,
  ZeroLend,
} from "../typechain-types";
import { e18 } from "./fixtures/utils";
import { deployVoters } from "./fixtures/voters";
import { ethers } from "hardhat";
import { time } from "@nomicfoundation/hardhat-network-helpers";

// Put inside governance-main/test/PoolVoter.poc.ts

// Run as:
// WALLET_PRIVATE_KEY=0x... NODE_ENV=test npx hardhat test test/Gauge.poc.ts --config hardhat.config.ts --network hardhat

describe.only("ZeroLend Immunefi Boost", () => {
  let ant: SignerWithAddress;
  let deployer: SignerWithAddress;
  let now: number;
  let omniStaking: OmnichainStaking;
  let poolVoter: PoolVoter;
  let reserve: TestnetERC20;
  let stakingBonus: StakingBonus;
  let vest: VestedZeroNFT;
  let pool: Pool;
  let aTokenGauge: GaugeIncentiveController;
  let zero: ZeroLend;
  let owner: SignerWithAddress;

  beforeEach(async () => {
    const deployment = await loadFixture(deployVoters);
    ant = deployment.ant;
    now = Math.floor(Date.now() / 1000);
    omniStaking = deployment.governance.omnichainStaking;
    poolVoter = deployment.poolVoter;
    reserve = deployment.lending.erc20;
    stakingBonus = deployment.governance.stakingBonus;
    vest = deployment.governance.vestedZeroNFT;
    zero = deployment.governance.zero;
    pool = deployment.lending.pool;
    aTokenGauge = deployment.aTokenGauge;
    owner = deployment.governance.lending.owner;
    deployer = deployment.governance.deployer;

    // deployer should be able to mint a nft for another user
    await vest.mint(
      ant.address,
      e18 * 20n, // 20 ZERO linear vesting
      0, // 0 ZERO upfront
      1000, // linear duration - 1000 seconds
      0, // cliff duration - 0 seconds
      now + 1000, // unlock date
      true, // penalty -> false
      0
    );

    // stake nft on behalf of the ant
    await vest
      .connect(ant)
      ["safeTransferFrom(address,address,uint256)"](
        ant.address,
        stakingBonus.target,
        1
      );

    // there should now be some voting power for the user to play with
    // ant voting power is ~ 19 ether
    expect(await omniStaking.balanceOf(ant.address)).lessThan(e18 * 20n);
  });

  it("Stuck reward in Gauge", async function () {
    let gaugeToken = await aTokenGauge.aToken();
    let atoken = await ethers.getContractAt("AToken", gaugeToken);

    // Mint 1 WETH to ant
    await reserve.connect(owner)["mint(address,uint256)"](ant.address, 1n * e18);
    expect(await reserve.balanceOf(ant.address)).eq(1n * e18);
    
    // Distribute reward, 10 ZeroLend when totalSupply == 0
    await zero.connect(deployer).approve(aTokenGauge.target, 10n * e18);
    await aTokenGauge.connect(deployer).notifyRewardAmount(zero.target, 10n * e18);

    // + 1 Hour
    await time.increase(3600);

    // Distribute reward, 10 ZeroLend when totalSupply == 0
    await zero.connect(deployer).approve(aTokenGauge.target, 10n * e18);
    await aTokenGauge.connect(deployer).notifyRewardAmount(zero.target, 10n * e18);

    // + 13 Days
    await time.increase(1123200);

    // Mint AToken from WETH for ant
    await reserve.connect(ant).approve(pool.target, 1n * e18);
    await pool.connect(ant).supply(reserve.target, 1n * e18, ant.address, 0n);
    expect(await atoken.balanceOf(ant.address)).greaterThan(0);

    // + 14 Days
    await time.increase(1209600);

    // ant gets reward for 1 day
    let earned = await aTokenGauge.earned(zero.target, ant.address);
    console.log(`${earned}`);

    // The rest of the Reward stuck and not recoverable
    expect(await zero.balanceOf(aTokenGauge.target)).greaterThan(10n * e18);
  });
});