Caviar contest - Apocalypto's results

Lines of code

https://github.com/code-423n4/2022-12-caviar/blob/0212f9dc3b6a418803dbfacda0e340e059b8aae2/src/Pair.sol#L63-L99 https://github.com/code-423n4/2022-12-caviar/blob/0212f9dc3b6a418803dbfacda0e340e059b8aae2/src/Pair.sol#L417-L427

Vulnerability details

Impact

Creation of the pair does not add initial liquidity which leads to situation where attacker can front-run creator and execute sandwich attack against the creator.

Exploitation Scenario:

1. Alice creates pair and wants to add liquidity
2. Bob front-runs Alice's add liquidity and quickly adds his liquidity with 100 ETH and 1 Fractional Tokens which mints 10 LP
3. Alice adds 100 ETH and 100 Fractional Tokens which gives 10 LP
4. The pool is 200 ETH and 101 Fractional Tokens
5. Bob withdraws liquidity with 10 LP gets 100 ETH and 50 Fractional Tokens
6. Bob just made nice profit

Proof of Concept

Pair.sol:

• https://github.com/code-423n4/2022-12-caviar/blob/0212f9dc3b6a418803dbfacda0e340e059b8aae2/src/Pair.sol#L63-L99
• https://github.com/code-423n4/2022-12-caviar/blob/0212f9dc3b6a418803dbfacda0e340e059b8aae2/src/Pair.sol#L417-L427

Tools Used

Manual Review

Recommended Mitigation Steps

It is recommended to initialize pair with the liquidity provided by the creator.

Lines of code

https://github.com/code-423n4/2022-12-caviar/blob/main/src/Pair.sol#L406-L409

Vulnerability details

Impact

the implementation of sellQuote follows the logic of getAmountOut from Uniswap V2 Library. However it doesn't add +1 as the original implementation, this could make the function return zero and lead to reverts.

Proof of Concept

https://github.com/code-423n4/2022-12-caviar/blob/main/src/Pair.sol#L406-L409

Tools Used

Manual review

Recommended Mitigation Steps

Just add 1 to returning value.