Missing Slippage Protection in the Supply Function

[howlbot-integration]

Lines of code

https://github.com/code-423n4/2024-05-predy/blob/main/src/PredyPool.sol#L222

Vulnerability details

Impact

The current supply function is susceptible to slippage issues. Slippage occurs when there is a difference between the expected price of a trade and the actual price at which the trade is executed. In the context of the supply function, slippage can lead to users receiving fewer bond tokens than anticipated when supplying either the quote or base tokens. This discrepancy can arise due to fluctuations in the market at the time of the transaction.

function supply(uint256 pairId, bool isQuoteAsset, uint256 supplyAmount)
        external
        nonReentrant
        returns (uint256 finalSuppliedAmount)
    {
        return SupplyLogic.supply(globalData, pairId, supplyAmount, isQuoteAsset);
    }

Proof of Concept

Consider a scenario where a user intends to supply a large amount of the quote token to the pool. Due to the size of the transaction, the supply might affect the pool's balance and, consequently, the interest rates and the bond token minting rate. If the transaction executes without slippage protection, the user might receive fewer bond tokens than expected.

For instance:

Alice supplies 1000 quote tokens.
Expected bond tokens: 950.
Actual Transaction without Slippage Protection:

Market conditions or pool liquidity changes during the transaction.
Alice receives only 900 bond tokens instead of 950.
The user faces an unexpected loss of 50 bond tokens due to slippage.

Tools Used

Manual Review

Recommended Mitigation Steps

Incorporate a mechanism to handle slippage tolerance. This can be achieved by allowing users to specify a minimum acceptable amount of bond tokens they are willing to receive from the transaction, and a deadline.

 /
 * @param minMintAmount The minimum acceptable amount of bond tokens to receive
 * @param deadline The latest time the transaction is valid
 */
function supply(uint256 pairId, bool isQuoteAsset, uint256 supplyAmount, uint256 minMintAmount, uint256 deadline) external nonReentrant returns(uint256 finalSuppliedAmount)
    

Assessed type

Context

[alex-ppg]

The supply function does not need slippage checks per the primary submission's discussion.

[c4-judge]

alex-ppg marked the issue as unsatisfactory:
Insufficient proof

[c4-judge]

alex-ppg changed the severity to QA (Quality Assurance)

[c4-judge]

alex-ppg marked the issue as grade-c