28702 - [SC - Insight] Malicious users can frontrun permits to DoS swaps

Submitted on Feb 24th 2024 at 12:22:34 UTC by @jaraxxus for Boost | Puffer Finance

Report ID: #28702

Report type: Smart Contract

Report severity: Insight

Target: https://etherscan.io/address/0x7276925e42f9c4054afa2fad80fa79520c453d6a

Impacts:

• Griefing (e.g. no profit motive for an attacker, but damage to the users or the protocol)

Description

Brief/Intro

A novel attack recently discovered, if permit is used within a function, it can be frontrunned and griefed.

Vulnerability Details

When swaps are available to the users (currently restricted), there is an option to do gasless transactions through the use of permit.

        try ERC20Permit(address(tokenIn)).permit({
            owner: msg.sender,
            spender: address(this),
            value: permitData.amount,
            deadline: permitData.deadline,
            v: permitData.v,
            s: permitData.s,
            r: permitData.r
        }) { } catch { }

If permit is used within a larger function, it can be frontrunned. Also, since the try/catch block does not catch any errors, nothing will prevent the frontrunning.

Impact Details

Permit will be frontrunned and swaps can be griefed. The user will lose the functionality that follows the permit().

References

https://vscode.blockscan.com/ethereum/0x7276925e42f9c4054afa2fad80fa79520c453d6a

Permit issue: https://www.trust-security.xyz/post/permission-denied

Proof of Concept

The permit call is within the swapAndDepositWithPermit() function. Also, the permit call does not catch any errors.

  function swapAndDepositWithPermit(
        address tokenIn,
        uint256 amountOutMin,
        IPufferDepositor.Permit calldata permitData,
        bytes calldata routeCode
    ) public payable virtual restricted returns (uint256 pufETHAmount) {
>       try ERC20Permit(address(tokenIn)).permit({
            owner: msg.sender,
            spender: address(this),
            value: permitData.amount,
            deadline: permitData.deadline,
            v: permitData.v,
            s: permitData.s,
            r: permitData.r
        }) { } catch { }

>       return swapAndDeposit(tokenIn, permitData.amount, amountOutMin, routeCode);

A better way to code the try/catch block is as such:

try (permit) {
return;
} catch {
    if(IERC20(token).allowance(owner, spender) >= value) {
        return;
    }
} revert("permit failure");
}

1. Try the permit first

2. If the permit fails, check if there is still allowance for the spender

3. Otherwise, revert the whole function.