# 25903 - \[SC - Insight] Possible loss of user funds by front-runing the... Submitted on Nov 20th 2023 at 23:39:49 UTC by @infosec\_us\_team for [Boost | DeGate](https://immunefi.com/bounty/boosteddegatebugbounty/) Report ID: #25903 Report type: Smart Contract Report severity: Insight Target: Impacts: * Permanent freezing of funds in the Default Deposit Contract that is less than 2,500,000 USD. * Griefing (e.g. no profit motive for an attacker, but damage to the users or the protocol) ## Description ## Bug description The current deployment process for the `ExchangeV3` and `DefaultDepositContract` smart contracts is as follows: **Step 1- Deploy the implementation** (transaction 1) > Example tx: **Step 2- Deploy proxy** (transaction 2) > Example tx: **Step 3- Make the proxy point to the implementation** (transaction 3) > Example tx: **Step 4- Initialize the implementation** (transaction 4) > Example tx: They are coded in a deployment script (). These transactions happen automatically one after the other. When deploying and initializing, the current workflow doesn't check if the previous transaction succeeds before continuing with the next one. The `initialize(address _exchange)` function inside `DefaultDepositContract` allows to set the exchange address and the `owner` of the smart contract. In the best case scenario the devs will have to re-deploy all the smart contracts once again, if the `initialize(address _exchange)` is front-run with an attacker-controlled `_exchange` address. In the worst case scenario, because the deployment script does not check if the previous transaction succeeded, the address of this maliciously initialized `DefaultDepositContract` may end up being used in the front-end of the site and users will directly transfer funds to it using the ERCO20 interface of the tokens (also known in DeGate as *realizing an unconfirmed standard deposit*), and their funds will be lock forever inside that smart contract. ## Permanent fix There are 3 ways of fixing this and we consider it is so easy to fix that doing so should not be overlooked: * **Run Step 1 to Step 4 atomically**. > Within the same transaction, do everything. Deploy, upgrade, and initialize the smart contracts. * **Alternatively, in the script check if the previous transaction succeed before going to the next one. Stop the deployment if something failed** > Not recommended, there's really not point on having to re-deploy everything if the initialization gets front-run. * **Modify the `initialize(...)` function of `DefaultDepositContract` and `ExchangeV3` to only allow the deployer to initialize them** ## Proof of concept Here's the deployment script proving that the result from the `initialize(...)` transaction is not checked: ```javascript const depositContractImp = await DefaultDepositContract.deployed(); await depositContractProxy.upgradeTo(depositContractImp.address); const depositContract = await DefaultDepositContract.at(depositContractProxy.address); // ------------------------- // Here we get front-run // ------------------------- // Here we try to initialize but it reverts because we were front-run await depositContract.initialize(exchangeV3.address); // Here we set the deposit contract in the exchangeV3 to compromised instance of DefaultDepositContract await exchangeV3.setDepositContract(depositContract.address); ``` > --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://reports.immunefi.com/degate/25903-sc-insight-possible-loss-of-user-funds-by-front-runing-the....md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.