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BadgerDAO ibBTC Wrapper contest
Findings & Analysis Report


Table of contents


About C4

Code4rena (C4) is an open organization consisting of security researchers, auditors, developers, and individuals with domain expertise in smart contracts.

A C4 code contest is an event in which community participants, referred to as Wardens, review, audit, or analyze smart contract logic in exchange for a bounty provided by sponsoring projects.

During the code contest outlined in this document, C4 conducted an analysis of the BadgerDAO ibBTC Wrapper smart contract system written in Solidity. The code contest took place between October 28—October 30 2021.


20 Wardens contributed reports to the BadgerDAO ibBTC Wrapper contest:

  1. hyh
  2. WatchPug (jtp and ming)
  3. gzeon
  4. jonah1005
  5. kenzo
  6. cmichel
  7. defsec
  8. hack3r-0m
  9. JMukesh
  10. pauliax
  11. pants
  12. TomFrench
  13. pmerkleplant
  14. loop
  15. gpersoon
  16. leastwood
  17. jah
  18. ye0lde
  19. ych18

This contest was judged by leastwood.

Final report assembled by moneylegobatman and CloudEllie.


The C4 analysis yielded an aggregated total of 23 unique vulnerabilities and 51 total findings. All of the issues presented here are linked back to their original finding.

Of these vulnerabilities, 4 received a risk rating in the category of HIGH severity, 4 received a risk rating in the category of MEDIUM severity, and 15 received a risk rating in the category of LOW severity.

C4 analysis also identified 12 non-critical recommendations and 16 gas optimizations.


The code under review can be found within the C4 BadgerDAO ibBTC Wrapper contest repository, and is composed of 90 smart contracts written in the Solidity programming language and includes 7479 lines of Solidity code.

Severity Criteria

C4 assesses the severity of disclosed vulnerabilities according to a methodology based on OWASP standards.

Vulnerabilities are divided into three primary risk categories: high, medium, and low.

High-level considerations for vulnerabilities span the following key areas when conducting assessments:

  • Malicious Input Handling
  • Escalation of privileges
  • Arithmetic
  • Gas use

Further information regarding the severity criteria referenced throughout the submission review process, please refer to the documentation provided on the C4 website.

High Risk Findings (4)

[H-01] The design of wibBTC is not fully compatible with the current Curve StableSwap pool

Submitted by WatchPug, also found by gzeon

Per the documentation, wibBTC is designed for a Curve StableSwap pool. However, the design of wibBTC makes the balances change dynamically and automatically. This is unusual for an ERC20 token, and it’s not fully compatible with the current Curve StableSwap pool.

Specifically, a Curve StableSwap pool will maintain the balances of its coins based on the amount of tokens added, removed, and exchanged each time. In another word, it can not adopt the dynamic changes of the balances that happened automatically.

The pool’s actual dynamic balance of wibBTC will deviate from the recorded balance in the pool contract as the pricePerShare increases.

Furthermore, there is no such way in Curve StableSwap similar to the sync() function of UNI v2, which will force sync the stored reserves to match the balances.



  • The current pricePerShare is: 1;
  • The Curve pool is newly created with 0 liquidity;
  • Alice added 100 wibBTC and 100 wBTC to the Curve pool; Alice holds 100% of the pool;
  • After 1 month with no activity (no other users, no trading), and the pricePerShare of ibBTC increases to 1.2;
  • Alice removes all the liquidity from the Curve pool.

While it’s expected to receive 150 wibBTC and 100 wBTC, Alice actually can only receive 100 wibBTC and 100 wBTC.

Consider creating a revised version of the Curve StableSwap contract that can handle dynamic balances properly.

dapp-whisperer (BadgerDAO) confirmed:

We will be creating a custom pool that takes this into account based on the rate_multiplier variable on the MetaPools.

[H-02] Approved spender can spend too many tokens

Submitted by cmichel, also found by WatchPug, jonah1005, gzeon, and TomFrench The approve function has not been overridden and therefore uses the internal shares, whereas transfer(From) uses the rebalanced amount.


The approved spender may spend more tokens than desired. In fact, the approved amount that can be transferred keeps growing with pricePerShare.

Many contracts also use the same amount for the approve call as for the amount they want to have transferred in a subsequent transferFrom call, and in this case, they approve an amount that is too large (as the approved shares amount yields a higher rebalanced amount).

The _allowances field should track the rebalanced amounts such that the approval value does not grow. (This does not actually require overriding the approve function.) In transferFrom, the approvals should then be subtracted by the transferred amount, not the amountInShares:

// _allowances are in rebalanced amounts such that they don't grow
// need to subtract the transferred amount
_approve(sender, _msgSender(), _allowances[sender][_msgSender()].sub(amount, "ERC20: transfer amount exceeds allowance"));

tabshaikh (Badger) confirmed and resolved:

Fix here:

[H-03] WrappedIbbtcEth contract will use stalled price for mint/burn if updatePricePerShare wasn’t run properly

Submitted by hyh, also found by cmichel, gpersoon, leastwood, hack3r-0m, kenzo, WatchPug, and loop


Malicious user can monitor SetPricePerShare event and, if it was run long enough time ago and market moved, but, since there were no SetPricePerShare fired, the contract’s pricePerShare is outdated, so a user can mint() with pricePerShare that is current for contract, but outdated for market, then wait for price update and burn() with updated pricePerShare, yielding risk-free profit at expense of contract holdings.

Proof of Concept

WrappedIbbtcEth updates pricePerShare variable by externally run updatePricePerShare function. The variable is then used in mint/burn/transfer functions without any additional checks, even if outdated/stalled. This can happen if the external function wasn’t run for any reason. The variable is used via balanceToShares function: WrappedIbbtcEth.sol L155

This is feasible as updatePricePerShare to be run by off-chain script being a part of the system, and malfunction of this script leads to contract exposure by stalling the price. The malfunction can happen both by internal reasons (bugs) and by external ones (any system-level dependencies, network outrages). updatePricePerShare function: WrappedIbbtcEth.sol L72

The risk comes with system design. Wrapping price updates with contract level variable for gas costs minimization is a viable approach, but it needs to be paired with corner cases handling. One of the ways to reduce the risk is as follows:

Introduce a threshold variable for maximum time elapsed since last pricePerShare update to WrappedIbbtcEth contract.

Then 2 variants of transferFrom and transfer functions can be introduced, both check condition {now - time since last price update < threshold}. If condition holds both variants, do the transfer. If it doesn’t, then the first variant reverts, while the second do costly price update. I.e. it will be cheap transfer (that works only if price is recent) and full transfer (that is similar to the first when price is recent, but do price update on its own when price is stalled). This way, this full transfer is guaranteed to run and is usually cheap, costing more if price is stalled and it does the update.

After this, whenever scheduled price update malfunctions (for example because of network conditions), the risk will be limited by market volatility during threshold time at maximum, i.e. capped.

See issue page for example code:

dapp-whisperer (BadgerDAO) confirmed:

Agreed, appreciate the thorough breakdown. We will add a “max staleness” to the ppfs update.

I do see some merit in the idea of “updating when needed” at expense of the next user, but due to interface considerations we’d like to keep that consistent for users. In practice, we will run a bot to ensure timely updates.

The pps updates are small and infrequent.

[H-04] WrappedIbbtc and WrappedIbbtcEth contracts do not filter out price feed outliers

Submitted by hyh


If price feed is manipulated in any way or there is any malfunction based volatility on the market, both contracts will pass it on a user. In the same time it’s possible to construct mitigation mechanics for such cases, so user economics would be affected by sustainable price movements only. As price outrages provide a substantial attack surface for the project it’s worth adding some complexity to the implementation.

Proof of Concept

In WrappedIbbtcEth pricePerShare variable is updated by externally run updatePricePerShare function (WrappedIbbtcEth.sol L72), and then used in mint/burn/transfer functions without additional checks via balanceToShares function: WrappedIbbtcEth.sol L155

In WrappedIbbtc price is requested via pricePerShare function(WrappedIbbtc.sol L123), and used in the same way without additional checks via balanceToShares function.

Introduce a minting/burning query that runs on a schedule, separating user funds contribution and actual mint/burn. With user deposit or burn, the corresponding action to be added to commitment query, which execution for mint or redeem will later be sparked by off-chain script according to fixed schedule. This also can be open to public execution with gas compensation incentive, for example as it’s done in Tracer protocol: PoolKeeper.sol L131

Full code of an implementation is too big to include in the report, but viable versions are available publicly (Tracer protocol version can be found at the same repo, implementation/PoolCommitter sol ).

Once the scheduled mint/redeem query is added, the additional logic to control for price outliers will become possible there, as in this case mint/redeem execution can be conditioned to happen on calm market only, where various definitions of calm can be implemented. One of the approaches is to keep track of recent prices and require that new price each time be within a threshold from median of their array.


// Introduce small price tracking arrays:
uint256\[] private times;
uint256\[] private prices;

// Current position in array
uint8 curPos;

// Current length, grows from 0 to totalMaxPos as prices are being added
uint8 curMaxPos;

// Maximum length, we track up to totalMaxPos prices
uint8 totalMaxPos = 10;

// Price movement threshold
uint256 moveThreshold = 0.1\*1e18;

We omit the full implementation here as it is lengthy enough and can vary. The key steps are:

  • Run query for scheduled mint/redeem with logic: if next price is greater than median of currently recorded prices by threshold, add it to the records, but do not mint/redeem.
  • That is, when scheduled mint/redeem is run, on new price request, WrappedIbbtcEth.core.pricePerShare() or, get newPrice and calculate current price array median, curMed
  • prices[curPos] = newPrice
  • if (curMaxPos < totalMaxPos) {curMaxPos += 1}
  • if (curPos == curMaxPos) {curPos = 0} else {curPos += 1}
  • if (absolutevalueof(newPrice - curMed) < moveThreshold * curMed / 1e18) {domint/redeem; return\0_status}
  • else {return_1_status}

Schedule should be frequent enough, say once per 30 minutes, which is kept while returned status is 0. While threshold condition isn’t met and returned status is 1, it runs once per 10 minutes. The parameters here are subject to calibration.

This way if the price movement is sustained the mint/redeem happens after price array median comes to a new equilibrium. If price reverts, the outbreak will not have material effect mint/burn operations. This way the contract vulnerability is considerably reduced as attacker would need to keep distorted price for period long enough, which will happen after the first part of deposit/withdraw cycle. I.e. deposit and mint, burn and redeem operations will happen not simultaneously, preventing flash loans to be used to elevate the quantities, and for price to be effectively distorted it would be needed to keep it so for substantial amount of time.

dapp-whisperer (BadgerDAO) confirmed:

Minting and burning happens atomically within larger function calls and our current approach isn’t amenable to this change.

Medium Risk Findings (4)

[M-01] Unable to transfer WrappedIbbtc if Oracle go down

Submitted by gzeon


In WrappedIbbtc, user will not be able to transfer if oracle.pricePerShare() (L124) revert. This is because balanceToShares() is called in both transfer and transferFrom, which included a call to pricePerShare().

If this is the expected behavior, note that WrappedIbbtcEth is behaving the opposite as it uses the cached value in a local variable pricePerShare, which is only updated upon call to updatePricePerShare().

Depending on the specification, one of them need to be changed.

dapp-whisperer (BadgerDAO) confirmed

[M-02] Null check in pricePerShare

Submitted by hack3r-0m, also found by defsec

oracle can 0 as a price of the share, in that case, 0 will be the denominator in some calculations which can cause reverts from SafeMath (for e.g here: WrappedIbbtc.sol L148) resulting in Denial Of Service.

Add a null check to ensure that on every update, the price is greater than 0.

dapp-whisperer (BadgerDAO) confirmed:

Agreed. we will implicitly or explicitly add this check.

[M-03] hard to clear balance

Submitted by jonah1005

The contract does not allow users to transfer by share. Therefore, It is hard for users to clear out all the shares. There will be users using this token with Metamask and it is likely the pricePerShare would increase after the user sends transactions. I consider this is a medium-risk issue.

Proof of Concept


A new transferShares beside the original transfer() would build a better UX. sushi’s bento box would be a good ref BentoBox.sol

dapp-whisperer (BadgerDAO) confirmed

[M-04] No sanity check on pricePerShare might lead to lost value

Submitted by kenzo

pricePerShare is read either from an oracle or from ibBTC’s core.

If one of these is bugged or exploited, there are no safety checks to prevent loss of funds.


As pricePerShare is used to calculate transfer amount, a bug or wrong data retuning a smaller pricePerShare than it really is, could result in drainage of wibbtc from Curve pool.

Proof of Concept

Curve’s swap and remove liquidity functions will both call wibbtc’s transfer function:

Therefore, if due to a bug or exploit in ibBTC core / the trusted oracle pricePerShare is smaller than it really is, the amount that will be sent will grow larger. So Curve will send to the user/exploiter doing swap/remove liquidity more tokens that he deserves.

Tools Used

Manual analysis, hardhat

Add sanity check:

pricePerShare should never decrease but only increase with time (as ibbtc accrues interest) (validated with DefiDollar team). This means that on every pricePerShare read/update, if the new pricePerShare is smaller than the current one, we can discard the update as bad data.

This will prevent an exploiter from draining Curve pool’s wibbtc reserves by decreasing pricePerShare.

dapp-whisperer (BadgerDAO) confirmed

Low Risk Findings (15)

Non-Critical Findings (12)

Gas Optimizations (16)


C4 is an open organization governed by participants in the community.

C4 Contests incentivize the discovery of exploits, vulnerabilities, and bugs in smart contracts. Security researchers are rewarded at an increasing rate for finding higher-risk issues. Contest submissions are judged by a knowledgeable security researcher and solidity developer and disclosed to sponsoring developers. C4 does not conduct formal verification regarding the provided code but instead provides final verification.

C4 does not provide any guarantee or warranty regarding the security of this project. All smart contract software should be used at the sole risk and responsibility of users.