50284 sc insight incorrect erc7201 storage implementation in core factory contracts

Submitted on Jul 23rd 2025 at 12:17:16 UTC by @AasifUsmani for Attackathon | Plume Network

• Report ID: #50284

• Report Type: Smart Contract

• Report severity: Insight

• Target: https://github.com/immunefi-team/attackathon-plume-network/blob/main/arc/src/ArcTokenFactory.sol

• Impacts:

  • Protocol insolvency

  • Temporary freezing of funds for at least 1 hour

Description

Brief/Intro

The ArcTokenFactory and RestrictionsFactory contracts claim to implement ERC7201 namespaced storage via @custom:storage-location erc7201: annotations but use incorrect storage slot calculations that violate the ERC7201 specification. This creates potential storage collision risks and is a standards compliance issue in core Plume Chain infrastructure contracts.

Vulnerability Details

Root Cause Analysis

Both factory contracts contain identical violations of the ERC7201 standard.

1. ArcTokenFactory.sol (simplified excerpt):

/// @custom:storage-location erc7201:arc.factory.storage
struct FactoryStorage {
    // ... storage fields
}

// ❌ VIOLATION: Uses simple keccak256 instead of ERC7201 formula
bytes32 private constant FACTORY_STORAGE_LOCATION = keccak256("arc.factory.storage");

function _getFactoryStorage() private pure returns (FactoryStorage storage fs) {
    bytes32 position = FACTORY_STORAGE_LOCATION;
    assembly {
        fs.slot := position
    }
}

1. RestrictionsFactory.sol (simplified excerpt):

/// @custom:storage-location erc7201:restrictions.factory.storage
struct FactoryStorage {
    // ... storage fields  
}

// ❌ VIOLATION: Uses simple keccak256 instead of ERC7201 formula
bytes32 private constant FACTORY_STORAGE_LOCATION = keccak256("restrictions.factory.storage");

function _getFactoryStorage() private pure returns (FactoryStorage storage fs) {
    bytes32 position = FACTORY_STORAGE_LOCATION;
    assembly {
        fs.slot := position
    }
}

ERC7201 Standard Requirements

According to EIP-7201, the correct storage slot calculation must be:

// Correct ERC7201 implementation:
bytes32 private constant FACTORY_STORAGE_LOCATION = 
    keccak256(abi.encode(uint256(keccak256("arc.factory.storage")) - 1)) & ~bytes32(uint256(0xff));

The ERC7201 formula ensures collision resistance through:

• Double hashing: keccak256(abi.encode(uint256(keccak256(namespace)) - 1))

• Byte masking: & ~bytes32(uint256(0xff)) ensures the last byte is 0x00

• Offset subtraction: -1 prevents direct collision with the inner hash

Impact Details

Storage Collision Risks

Because the contracts use a plain keccak256(namespace) as the storage slot:

• It can collide with storage slots used by common libraries (e.g., OpenZeppelin AccessControlUpgradeable, UUPSUpgradeable, Initializable).

• During upgrades, overlapping slots could corrupt state leading to broken behavior or loss of funds.

System-Level Impact

These are core infrastructure contracts:

• ArcTokenFactory manages creation and upgrades of ARC tokens.

• RestrictionsFactory manages restriction module deployments.

Storage corruption in either can:

• Break token creation/upgrades

• Corrupt restriction module mappings

• Cause system-wide degradation and require emergency migrations

Standards Compliance Issue

Contracts claim ERC7201 compliance via annotations but do not implement its slot calculation correctly. This misleads developers/auditors and breaks tooling that expects ERC7201 namespaces.

Required Actions

1

Correct storage slot calculation

Immediately correct the storage slot calculations to follow the ERC-7201 formula (double-hash + offset + byte mask) for each @custom:storage-location erc7201: namespace.

2

Align annotations with actual implementation

If ERC7201 is not being implemented, remove or correct the @custom:storage-location erc7201: annotations so documentation and code are consistent.

References

1. ArcTokenFactory: https://github.com/immunefi-team/attackathon-plume-network/blob/580cc6d61b08a728bd98f11b9a2140b84f41c802/arc/src/ArcTokenFactory.sol#L62

2. RestrictionsFactory: https://github.com/immunefi-team/attackathon-plume-network/blob/580cc6d61b08a728bd98f11b9a2140b84f41c802/arc/src/restrictions/RestrictionsFactory.sol#L43

3. EIP - 7201 documentation and mandates: https://eips.ethereum.org/EIPS/eip-7201

Proof of Concept

PoC solidity test demonstrating slot differences (click to expand)

To run the PoC, create a new file in arc/tests/EIPTests.t.sol and copy/paste the following. Run: forge test --mt test_StorageSlotCalculationComparison -vvvv --via-ir

// SPDX-License-Identifier: MIT
pragma solidity ^0.8.25;

import "forge-std/Test.sol";
import "forge-std/console.sol";

contract ERC7201ViolationTest is Test {
    
    function test_StorageSlotCalculationComparison() public view {
        // Current implementation (INCORRECT)
        bytes32 currentArcFactory = keccak256("arc.factory.storage");
        bytes32 currentRestrictionsFactory = keccak256("restrictions.factory.storage");
        
        // Correct ERC7201 implementation
        bytes32 correctArcFactory = keccak256(
            abi.encode(uint256(keccak256("arc.factory.storage")) - 1)
        ) & ~bytes32(uint256(0xff));
        
        bytes32 correctRestrictionsFactory = keccak256(
            abi.encode(uint256(keccak256("restrictions.factory.storage")) - 1)
        ) & ~bytes32(uint256(0xff));
        
        console.log("=== Storage Slot Comparison ===");
        console.log("ArcTokenFactory:");
        console.logBytes32(currentArcFactory);
        console.log("Should be:");
        console.logBytes32(correctArcFactory);
        
        console.log("RestrictionsFactory:");
        console.logBytes32(currentRestrictionsFactory);
        console.log("Should be:");
        console.logBytes32(correctRestrictionsFactory);
        
        // Demonstrate they are different
        assert(currentArcFactory != correctArcFactory);
        assert(currentRestrictionsFactory != correctRestrictionsFactory);
        
        // Show ERC7201 slots always end in 0x00
        assert(uint8(uint256(correctArcFactory)) == 0);
        assert(uint8(uint256(correctRestrictionsFactory)) == 0);
        
        console.log("ERC7201 violation confirmed: slots do not match standard");
    }
}