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#44355 [SC-High] announcer owner can inflate announcers registry entries via mutate and register loop to claim most of rewards

#44355 [SC-High] Announcer Owner Can Inflate Announcers Registry Entries via Mutate and Register Loop to Claim Most of Rewards

Submitted on Apr 22nd 2025 at 07:02:34 UTC by @perseverance for IOP | CircuitDAO

  • Report ID: #44355

  • Report Type: Smart Contract

  • Report severity: High

  • Target: https://github.com/immunefi-team/CircuitDAO-IoP/tree/main/circuit_puzzles

  • Impacts:

    • Theft of unclaimed yield

Description

Short Summary

The announcer owner can repeatedly use the announcer_mutate operation to change their atom_announcer coin's INNER_PUZZLE_HASH and then re-register the announcer using the announcer_register operation with the new hash in the announcer_registry. Because the registry uses the mutable inner_puzzle_hash as the unique identifier instead of the immutable LAUNCHER_ID, the owner can create multiple distinct entries in the registry, all ultimately controlled by them. This inflates the apparent number of unique announcers, causing the reward distribution mechanism (MINT operation in the registry) to allocate them a disproportionately large share of the CRT rewards, effectively draining rewards intended for other legitimate participants.

Background Information

The announcer_registry.clsp puzzle serves as a central registry tracking active and approved Announcers within the Circuit DAO protocol. One of its key functions, triggered by the MINT operation, is to facilitate the distribution of CRT (Circuit DAO Token) rewards to registered announcers. The intended mechanism involves calculating the total rewards for an interval (crt_credits_per_interval) and dividing this amount proportionally among the currently registered announcers based on the count of entries in the ANNOUNCER_REGISTRY list. This aims to fairly compensate active participants.

Reference: https://docs.circuitdao.com/technical-manual/announcer-registry#mint and https://github.com/immunefi-team/CircuitDAO-IoP/blob/d2c3171f08864c29fdd436e25a39c95b371df860/circuit_puzzles/announcer_registry.clsp#L102-L121

The Vulnerability and Vulnerability Details

The vulnerability stems from the interaction between three components: announcer_mutate.clsp, announcer_register.clsp, and announcer_registry.clsp.

  1. Mutable Identifier in Registry: The announcer_registry.clsp uses the announcer_inner_puzzle_hash provided in the RECEIVE_MESSAGE 0x12 from announcer_register as the unique key to identify and register an announcer. It checks if this specific hash already contains in the ANNOUNCER_REGISTRY list before adding it.

    https://github.com/immunefi-team/CircuitDAO-IoP/blob/d2c3171f08864c29fdd436e25a39c95b371df860/circuit_puzzles/announcer_registry.clsp#L133-L134

(assert
            (not (contains ANNOUNCER_REGISTRY announcer_inner_puzzle_hash))

  1. Owner Can Mutate "Inner Puzzle Hash": The announcer_mutate.clsp puzzle explicitly allows the owner (who can provide the current inner_puzzle_hash) to change the INNER_PUZZLE_HASH of their atom_announcer coin to a new_puzzle_hash. This is a legitimate operation for transferring ownership or updating control logic.

https://github.com/immunefi-team/CircuitDAO-IoP/blob/d2c3171f08864c29fdd436e25a39c95b371df860/circuit_puzzles/programs/announcer_mutate.clsp#L34-L40

(list CREATE_COIN
            (curry_hashes MOD_HASH
              (sha256 ONE MOD_HASH)
              (sha256tree STATUTES_STRUCT)
              (sha256 ONE LAUNCHER_ID)
              (sha256 ONE (if new_puzzle_hash new_puzzle_hash INNER_PUZZLE_HASH))
              (sha256 ONE APPROVED)

  1. Mutation Doesn't Affect Registry: The announcer_mutate operation only affects the state of the atom_announcer coin itself. It does not communicate with the announcer_registry to inform it about the change in the inner_puzzle_hash or to de-register the old hash.

Exploitation

This allows a malicious owner to perform the following loop:

Step 1:   Register with `inner_puzzle_hash_A`. Registry contains `inner_puzzle_hash_A`.

Step 2:   Use `announcer_mutate` to change the announcer coin's hash to `inner_puzzle_hash_B`.

Step 3: Register again using the mutated coin (now controlled by hash `inner_puzzle_hash_B`). The registry checks for B (not found) and adds it. Registry contains `(B A)`.

Step 4:    Use `announcer_mutate` to change the announcer coin's hash to `inner_puzzle_hash_C`.

Step 5:   Register again using the mutated coin (now controlled by hash C). The registry checks for C (not found) and adds it. Registry contains `(inner_puzzle_hash_C inner_puzzle_hash_B inner_puzzle_hash_A)`.

...and so on.

Reward Distribution Impact:

When the MINT operation runs on the announcer_registry, it calculates announcers_count by counting the number of entries in ANNOUNCER_REGISTRY.

Supposed the total of announcers is 3. T

The total reward crt_credits_per_interval is divided by this count. The generate-offer-assert function then creates payment conditions for each entry (A, B, and C). Since the owner controls all these inner puzzle hashes, they effectively receive 3 shares of the reward pool instead of the intended 1 share.

Normal operation: Reward for the announcer should be : crt_credits_per_interval /3

After the hack: Reward for the announcer is: crt_credits_per_interval * 3 / 5 that is 60/33.3 = 1.8 times bigger

https://github.com/immunefi-team/CircuitDAO-IoP/blob/d2c3171f08864c29fdd436e25a39c95b371df860/circuit_puzzles/announcer_registry.clsp#L102-L121

(sha256tree
                    (c
                      my_coin_id ; nonce
                      (generate-offer-assert
                        ANNOUNCER_REGISTRY
                        (/ crt_credits_per_interval announcers_count)
                        (if (> change_amount 0)
                          ; we reward the mint spender with remainder if any
                          (list
                            (list
                              change_receiver_hash
                              change_amount
                              (list change_receiver_hash)
                            )
                          )
                          ()
                        )
                      )
                    )
                  )

This fundamentally breaks the reward distribution fairness, allowing a single announcer owner to drain rewards intended for the broader set of unique participants.

Severity assessment

  • Bug Severity: High

  • Impact category:

    • Theft of unclaimed yield

    • Unfair reward distribution.

    • Theft/Drain of rewards intended for other participants.

  • Likelihood: High

    • The attack requires only standard owner operations (announcer_mutate, announcer_register).

    • There is a clear financial incentive for an owner to perform this attack.

Proof of Concept

Proof of concept (Conceptual Steps):

  1. Initial State: Owner controls AtomAnnouncer_A (Launcher ID: L1, Inner Puzzle Hash: IPH_A). ANNOUNCER_REGISTRY state is empty.

  2. Register A: Owner calls register on AtomAnnouncer_A. Registry receives message with IPH_A, checks (not (contains reg IPH_A)) (true), adds IPH_A. ANNOUNCER_REGISTRY state: (IPH_A).

  3. Mutate A to B: Owner calls mutate on AtomAnnouncer_A, providing new_puzzle_hash = IPH_B. A new coin AtomAnnouncer_B is created (Launcher ID: L1, Inner Puzzle Hash: IPH_B). ANNOUNCER_REGISTRY state remains (IPH_A).

  4. Register B: Owner calls register on AtomAnnouncer_B. Registry receives message with IPH_B, checks (not (contains reg IPH_B)) (true), adds IPH_B. Registry state: (IPH_B IPH_A).

  5. Mutate B to C: Owner calls mutate on AtomAnnouncer_B, providing new_puzzle_hash = IPH_C. A new coin AtomAnnouncer_C is created (Launcher ID: L1, Inner Puzzle Hash: IPH_C). ANNOUNCER_REGISTRY state remains (IPH_B IPH_A).

  6. Register C: Owner calls register on AtomAnnouncer_C. Registry receives message with IPH_C, checks (not (contains reg IPH_C)) (true), adds IPH_C. ANNOUNCER_REGISTRY state: (IPH_C IPH_B IPH_A).

  7. Another announcer register with IPH_D . ANNOUNCER_REGISTRY state: (IPH_D IPH_C IPH_B IPH_A).

  8. Another announcer register with IPH_E . ANNOUNCER_REGISTRY state: (IPH_E IPH_D IPH_C IPH_B IPH_A).

  9. Claim Rewards (MINT): MINT operation triggers on AnnouncerRegistry.

    • announcers_count is calculated as 5.

    • Total rewards R are divided by 3 (R/5).

    • generate-offer-assert creates payments of R/5 for IPH_A, IPH_B, and IPH_C.

    • Owner, controlling all three puzzle hashes, claims 3 * (R/5) = 60% R total rewards, instead of the intended R / (number of *unique* announcers).

Mermaid Sequence Diagram: or attached png below illustrates the attack sequence.

sequenceDiagram
    participant Owner
    participant AtomAnnouncer_A as Atom Announcer (IPH_A, L1)
    participant AtomAnnouncer_B as Atom Announcer (IPH_B, L1)
    participant AtomAnnouncer_C as Atom Announcer (IPH_C, L1)
    participant AtomAnnouncer_D as Atom Announcer (IPH_D, L2)
    participant AtomAnnouncer_E as Atom Announcer (IPH_E, L3)
    participant AnnouncerRegistry as Announcer Registry
    participant SettlementPayments as Settlement Payments

    Owner->>AtomAnnouncer_A: Call register()
    AtomAnnouncer_A->>AnnouncerRegistry: Send Message 0x12 (IPH_A)
    AnnouncerRegistry->>AnnouncerRegistry: Add IPH_A to registry [IPH_A]

    Owner->>AtomAnnouncer_A: Call mutate(new_puzzle_hash=IPH_B)
    Note right of AtomAnnouncer_A: Coin state updated to IPH_B
    AtomAnnouncer_A-->>Owner: Mutated Coin (now IPH_B)

    Owner->>AtomAnnouncer_B: Call register()
    AtomAnnouncer_B->>AnnouncerRegistry: Send Message 0x12 (IPH_B)
    AnnouncerRegistry->>AnnouncerRegistry: Add IPH_B to registry [IPH_B, IPH_A]

    Owner->>AtomAnnouncer_B: Call mutate(new_puzzle_hash=IPH_C)
    Note right of AtomAnnouncer_B: Coin state updated to IPH_C
    AtomAnnouncer_B-->>Owner: Mutated Coin (now IPH_C)

    Owner->>AtomAnnouncer_C: Call register()
    AtomAnnouncer_C->>AnnouncerRegistry: Send Message 0x12 (IPH_C)
    AnnouncerRegistry->>AnnouncerRegistry: Add IPH_C to registry [IPH_C, IPH_B, IPH_A]

    AtomAnnouncer_D->>AnnouncerRegistry: Call register()
    AnnouncerRegistry->>AnnouncerRegistry: Add IPH_D to registry [IPH_D, IPH_C, IPH_B, IPH_A]

    AtomAnnouncer_E->>AnnouncerRegistry: Call register()
    AnnouncerRegistry->>AnnouncerRegistry: Add IPH_E to registry [IPH_E, IPH_D, IPH_C, IPH_B, IPH_A]

    Owner->>AnnouncerRegistry: Call MINT operation    
    AnnouncerRegistry->>AnnouncerRegistry: Count announcers (count = 5)
    AnnouncerRegistry->>AnnouncerRegistry: Divide rewards by 5
    AnnouncerRegistry->>SettlementPayments: Create payments for IPH_A, IPH_B, IPH_C (via ASSERT_PUZZLE_ANNOUNCEMENT)

    SettlementPayments-->>Owner: Pays reward share for IPH_A
    SettlementPayments-->>Owner: Pays reward share for IPH_B
    SettlementPayments-->>Owner: Pays reward share for IPH_C
    SettlementPayments-->>AtomAnnouncer_D: Pays reward share for IPH_D
    SettlementPayments-->>AtomAnnouncer_E: Pays reward share for IPH_E
Previous#44324 [SC-Medium] atom announcer owner can nulify financial penalty by self penalizing NextSpectra Finance

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