# #42355 \[SC-Medium] Compounding can be sandwich attacked **Submitted on Mar 23rd 2025 at 08:52:44 UTC by @Oxl33 for** [**Audit Comp | Yeet**](https://immunefi.com/audit-competition/audit-comp-yeet) * **Report ID:** #42355 * **Report Type:** Smart Contract * **Report severity:** Medium * **Target:** * **Impacts:** * Theft of unclaimed royalties ## Description **Description:** Attackers (MEV bots) can sandwich attack manager's transaction, when he calls `MoneyBrinter::compound`, which leads to part of the rewards going to the attacker, instead of to regular users. Example scenario: Reminder - vault has no max-deposit/max-mint restrictions (`ERC4626::maxDeposit` and `ERC4626::maxMint` functions not overridden), so attackers can take a flashloan and deposit as much as they want, to end up with the majority of vault shares after depositing. State before frontrun (normal state): * assets in vault: `100 000e18` * shares in vault: `100 000e23` State before compound (attacker frontran and deposited `100 000e18` assets): * assets in vault: `200 000e18` * shares in vault: `200 000e23` State after compound (before backrun): * assets in vault: `210 000e18` (`10 000e18` assets added as rewards) * shares in vault: `200 000e23` (no shares minted) State after backrun (Attacker withdrew all his shares): * assets in vault: `105 000e18` (only `5 000e18` of rewards left) * shares in vault: `100 000e23` If fee is `1%`, fee = `1 039.6e18`, profit for attacker = `5 000e18` - `1 039.6e18` = `3 960.4e18` One way to fight this attack is for owner to increase exit fee before calling `compound` to make the attack unprofitable, then decrease the fee after. But this is not a convenient solution, because of these reasons: 1. It requires owner AND manager to be involved for every compound action (only owner can adjust exit fee, so manager alone cannot complete the process) 2. If there will be a time where manager calls `compound` without increasing the fee, especially if current fee is `0%`, then the sandwich attacker will steal up to `99%` of the newly added rewards from regular users Easier solution to fight this type of attack would be to prevent withdrawals in the same block as deposits, or give the manager a function to pause the ability to deposit, so he can call it before calling `compound`. **Impact:** I believe the best fitting impact for this issue is `Theft of unclaimed royalties`, because attackers can steal newly added rewards, before regular users have the chance to claim them. **Recommended Mitigation:** Consider implementing withdrawal/redeem prevention in the same block as a deposit/mint, this will protect against attackers who need to take out a flashloan for the attack. Additionally, consider implementing a function that pauses the ability to deposit/mint, and give the rights to call it only to manager, so he can call it before calling `compound`. ## Proof of Concept **Proof of Concept:** Consider this scenario: 1. Manager calls `MoneyBrinter::harvestBeradromeRewards` 2. Manager calls `MoneyBrinter::compound` 3. MEV bot sees this transaction in the mempool, and frontruns it with a big deposit into the vault 4. Manager's `compound` transaction goes through after the bot already deposited 5. MEV bot backruns the `compound` and redeems all his shares, receiving more assets than he deposited, due to increased `totalAssets`, but the same `totalSupply` 6. Regular users are left with less rewards, and the MEV bot profits from it --- # 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/yeet/42355-sc-medium-compounding-can-be-sandwich-attacked.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.