Cally contest - Czar102's results

Lines of code

https://github.com/code-423n4/2022-05-cally/blob/main/contracts/src/Cally.sol#L117-L121

Vulnerability details

Fee is set by an admin and can be set maliciously to steal the funds that are entitled to go to the user.

Impact

Fee can be set to a maliciously high value to unfairly extract funds from protocol users. An owner can buy options, set fee to 100% and exercise options, paying only premium for tokens locked.

Additionally, the fee can be set to more than 100% causing a DoS of the exercise function, completely breaking contract's purpose. (the revertion happens when expression msg.value - fee underflows)

Tools Used

Manual analysis

Recommended Mitigation Steps

Set an upper limit to the fee not to go unconstrained.

Add an agreedFee parameter to createVault(...) arguments and require it is the fee in the storage, then save it as a vault parameter.

Low severity issues

Incorrect revert message

In contracts/src/Cally.sol#L169 the revert message is false - "Reserve strike too small". If reverts, it is too large. Additionally, a sharp inequality is used - someone may want just to present a price and skip the dutch auction - then equality would be useful.

Non-critical issues

Use !value instead of value == false

To increase readability, negate bool values instead of ensuring they are false. This is a best practice.

Cally.sol#L217

Cally.sol#L220

Cally.sol#L328

Economic calculations unnecessarily use approximations

In Cally.getDutchAuctionStrike(...) there are fixed-point calculations. At first progress is approximated, then used in calculations. It would be more precise to inline the calculation in the strike calculation.

Instead of:

        uint256 progress = (1e18 * delta) / AUCTION_DURATION;
        uint256 auctionStrike = (progress * progress * startingStrike) / (1e18 * 1e18);

write:

        uint256 auctionStrike = (delta * delta * startingStrike) / (AUCTION_DURATION * AUCTION_DURATION);