QuickSwap and StellaSwap contest - Trust's results

Lines of code

https://github.com/code-423n4/2022-09-quickswap/blob/15ea643c85ed936a92d2676a7aabf739b210af39/src/core/contracts/AlgebraPool.sol#L193

Vulnerability details

Description

In Quickswap, the same AlgebraPoolDeployer deploys all pairs (using createPool). An attacker can wait for Quickswap to create the factory and then create all the popular coin pairs using the permissionless createPool. They may then call the permissionless initialize() pool function to set an unreasonably low or high initial price ( 2^-128 or 2^128). Price only changes during swap operations as liquidity is consumed. The bad price will mess up the limitSqrtPrice check during swaps, making users either unable to use the pool, or not be able to set reasonable slippage and open himself up to large MEV losses.

The relevant section in swap inner function _calculateSwapAndLock:

      if (zeroToOne) {
        require(limitSqrtPrice < currentPrice && limitSqrtPrice > TickMath.MIN_SQRT_RATIO, 'SPL');
        cache.totalFeeGrowth = totalFeeGrowth0Token;
        cache.communityFee = _communityFeeToken0;
      } else {
        require(limitSqrtPrice > currentPrice && limitSqrtPrice < TickMath.MAX_SQRT_RATIO, 'SPL');
        cache.totalFeeGrowth = totalFeeGrowth1Token;
        cache.communityFee = _communityFeeToken1;
      }

Impact

Affected pairs will not be able to be used, or factory will need to be redeployed and the entire liquidity migrated.

Tools Used

Manual audit.

Recommended Mitigation Steps

Insert a check that the current price is appropriate before enforcing it with limitSqrtPrice.