dany.armstrong90 - Attacker can inflate stake rewards as he wants.

[sherlock-admin3]

dany.armstrong90

High

Attacker can inflate stake rewards as he wants.

Summary

FeeRewardsProcess.sol#updateAccountFeeRewards function uses balance of account as amount of stake tokens.
Since it is possible to transfer stake tokens to any accounts, attacker can flash loan other's stake tokens to inflate stake rewards.

Vulnerability Detail

FeeRewardsProcess.sol#updateAccountFeeRewards function is the following.

    function updateAccountFeeRewards(address account, address stakeToken) public {
        StakingAccount.Props storage stakingAccount = StakingAccount.load(account);
        StakingAccount.FeeRewards storage accountFeeRewards = stakingAccount.getFeeRewards(stakeToken);
        FeeRewards.MarketRewards storage feeProps = FeeRewards.loadPoolRewards(stakeToken);
        if (accountFeeRewards.openRewardsPerStakeToken == feeProps.getCumulativeRewardsPerStakeToken()) {
            return;
        }
63:     uint256 stakeTokens = IERC20(stakeToken).balanceOf(account);
        if (
            stakeTokens > 0 &&
            feeProps.getCumulativeRewardsPerStakeToken() - accountFeeRewards.openRewardsPerStakeToken >
            feeProps.getPoolRewardsPerStakeTokenDeltaLimit()
        ) {
            accountFeeRewards.realisedRewardsTokenAmount += (
                stakeToken == CommonData.getStakeUsdToken()
                    ? CalUtils.mul(
                        feeProps.getCumulativeRewardsPerStakeToken() - accountFeeRewards.openRewardsPerStakeToken,
                        stakeTokens
                    )
                    : CalUtils.mulSmallRate(
                        feeProps.getCumulativeRewardsPerStakeToken() - accountFeeRewards.openRewardsPerStakeToken,
                        stakeTokens
                    )
            );
        }
        accountFeeRewards.openRewardsPerStakeToken = feeProps.getCumulativeRewardsPerStakeToken();
        stakingAccount.emitFeeRewardsUpdateEvent(stakeToken);
    }

Balance of account is used as amount of stake tokens in L63.
But since the stake tokens can be transferred to any other account, attacker can inflate stake token rewards by flash loan.

Example:

1. User has two account: account1, account2.
2. User has staked 1000 ETH in account1 and 1000 ETH in account2.
3. After a period of time, user transfer 1000 xETH from account2 to account1 and claim rewards for account1.
4. Now, attacker can claim rewards twice for account1.
5. In the same way, attacker can claim rewards twice for account2 too.

Impact

Attacker can inflate stake rewards as he wants using this vulnerability.

Code Snippet

https://github.com/sherlock-audit/2024-05-elfi-protocol/blob/main/elfi-perp-contracts/contracts/process/FeeRewardsProcess.sol#L63

Tool used

Manual Review

Recommendation

Use stakingAccount.stakeTokenBalances[stakeToken].stakeAmount instead of stake token balance as follows.

    function updateAccountFeeRewards(address account, address stakeToken) public {
        StakingAccount.Props storage stakingAccount = StakingAccount.load(account);
        StakingAccount.FeeRewards storage accountFeeRewards = stakingAccount.getFeeRewards(stakeToken);
        FeeRewards.MarketRewards storage feeProps = FeeRewards.loadPoolRewards(stakeToken);
        if (accountFeeRewards.openRewardsPerStakeToken == feeProps.getCumulativeRewardsPerStakeToken()) {
            return;
        }
--      uint256 stakeTokens = IERC20(stakeToken).balanceOf(account);
++      uint256 stakeTokens = stakingAccount.stakeTokenBalances[stakeToken].stakeAmount;
        if (
            stakeTokens > 0 &&
            feeProps.getCumulativeRewardsPerStakeToken() - accountFeeRewards.openRewardsPerStakeToken >
            feeProps.getPoolRewardsPerStakeTokenDeltaLimit()
        ) {
            accountFeeRewards.realisedRewardsTokenAmount += (
                stakeToken == CommonData.getStakeUsdToken()
                    ? CalUtils.mul(
                        feeProps.getCumulativeRewardsPerStakeToken() - accountFeeRewards.openRewardsPerStakeToken,
                        stakeTokens
                    )
                    : CalUtils.mulSmallRate(
                        feeProps.getCumulativeRewardsPerStakeToken() - accountFeeRewards.openRewardsPerStakeToken,
                        stakeTokens
                    )
            );
        }
        accountFeeRewards.openRewardsPerStakeToken = feeProps.getCumulativeRewardsPerStakeToken();
        stakingAccount.emitFeeRewardsUpdateEvent(stakeToken);
    }

[sherlock-admin2]

The protocol team fixed this issue in the following PRs/commits:
https://github.com/0xCedar/elfi-perp-contracts/pull/19

[sherlock-admin2]

The Lead Senior Watson signed off on the fix.