Canto Dex Oracle contest
Findings & Analysis Report

2023-03-31

Overview
- About C4
- Wardens
Summary
Scope
Severity Criteria
High Risk Findings (1)
- [H-01] Hardcoded USD pegs can be broken
Medium Risk Findings (6)
Low Risk and Non-Critical Issues
Disclosures

Overview

About C4

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

A C4 audit 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 audit contest outlined in this document, C4 conducted an analysis of the Canto Dex Oracle smart contract system written in Solidity. The audit contest took place between September 7—September 8 2022.

Wardens

70 Wardens contributed reports to the Canto Dex Oracle contest:

Critical
csanuragjain
Respx
linmiaomiao
hickuphh3
__141345__
sorrynotsorry
Jeiwan
SinceJuly
Chom
0xSmartContract
cccz
V_B (Barichek and vlad_bochok)
0xNazgul
0xSky
CertoraInc (egjlmn1, OriDabush, ItayG, shakedwinder, and RoiEvenHaim)
Deivitto
fatherOfBlocks
hansfriese
oyc_109
rbserver
rokinot
Tomo
0xhunter
BipinSah
m_Rassska
prasantgupta52
Rohan16
Sm4rty
0x040
0x1f8b
0x52
0xA5DF
a12jmx
ajtra
ak1
Bnke0x0
Bronicle
codexploder
CodingNameKiki
cryptphi
Diraco
Dravee
erictee
EthLedger
gogo
hake
ignacio
IgnacioB
JansenC
JC
lukris02
ontofractal
p_crypt0
pashov
peritoflores
R2
rajatbeladiya
RaymondFam
ReyAdmirado
Rolezn
rvierdiiev
tnevler
TomJ
Yiko

This contest was judged by 0xean.

Final report assembled by itsmetechjay.

Summary

The C4 analysis yielded an aggregated total of 7 unique vulnerabilities. Of these vulnerabilities, 1 received a risk rating in the category of HIGH severity and 6 received a risk rating in the category of MEDIUM severity.

Additionally, C4 analysis included 51 reports detailing issues with a risk rating of LOW severity or non-critical.

All of the issues presented here are linked back to their original finding.

Scope

The code under review can be found within the C4 Canto Dex Oracle contest repository, and is composed of 2 smart contracts written in the Solidity programming language and includes 2,001 lines of Solidity code.

Severity Criteria

C4 assesses the severity of disclosed vulnerabilities based on three primary risk categories: high, medium, and low/non-critical.

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

Malicious Input Handling
Escalation of privileges
Arithmetic
Gas use

For more information regarding the severity criteria referenced throughout the submission review process, please refer to the documentation provided on the C4 website, specifically our section on Severity Categorization.

High Risk Findings (1)

[H-01] Hardcoded USD pegs can be broken

Submitted by hickuphh3, also found by __141345__, Critical, linmiaomiao, and sorrynotsorry

The prices of USDC and USDT, which (I assume) are the underlying tokens of cUSDC and cUSDT, have been hardcoded to parity. Such practices are highly discouraged because while the likelihood of either stablecoin de-pegging is low, it is not zero.

Because of the UST debacle, the price of USDT dropped to $0.95 before making a recovery.

Impact

Here is an example of how a lending protocol on Fantom was affected by such a depeg event because they hardcoded the value.

To quote philosopher George Santayana, “Those who cannot remember the past are condemned to repeat it.”

Recommended Mitigation Steps

Consider using a price feed by trusted and established oracle providers like Chainlink, Band Protocol or Flux. The USDC/NOTE or USDT/NOTE price feed may be used as well, but NOTE has its own volatility concerns.

Medium Risk Findings (6)

[M-01] unbounded loop length dos

Submitted by 0xhunter, also found by BipinSah, fatherOfBlocks, m_Rassska, oyc_109, prasantgupta52, Rohan16, rokinot, Sm4rty, and Tomo

Loops that do not have a fixed number of iterations, for example, loops that depend on storage values, have to be used carefully: Due to the block gas limit, transactions can only consume a certain amount of gas. Either explicitly or just due to normal operation, the number of iterations in a loop can grow beyond the block gas limit which can cause the complete contract to be stalled at a certain point.

By calling createPair function a pair will be pushed to allPairs array , an admin can call setPeriodSize function and set newPeriod for every pairs in allpair array , however by spamming createPair function the loop in setPeriodSize function may revert in case of hitting gas limit of the network . since there is no way to remove allPairs or decrease their length in setPeriodSize function , its possible to totally make it impossible to call the setPeriodSize function.

In order to fix the issue setPeriodSize function has to be able to become executed in multiple times in case of facing gas limit.

nivasan1 (Canto) disagreed wtih severity and commented:

Given that it is not expected for admin to change the period size in the router often, we do not consider this a high-risk vulnerability. This would also cost an infinite amount of Canto if orchestrated by a single user.

0xean (judge) decreased severity to Medium and commented:

I am not sure the frequency that this is set to be used matter, it does lead to the functionality being lost. However, I do not see it leading to a loss of user funds, so will downgrade to a medium severity.

This would also cost an infinite amt of Canto if orchestrated by a single user <- I am also not sure I understand this point. Can you explain further? What are the transaction gas limits set on this network?

nivasan1 (Canto) commented:

@0xean, the method mentioned requires admin privileges to call it. As such, in order for an address that isn’t timelock to access this method a malicious governance proposal must be passed to call the method from timelock, or to pass governance privileges to the malicious address. Secondly, the malicious user would have to spend a significant amount of Canto in deploying and adding sufficient liquidity to the contracts desired. As such, the risk-rewards for this action makes it unclear why any user would attempt to do this.

0xean (judge) commented:

I don’t think this is necessarily an attack vector, simply a way that the intended logic of the contracts could fail. If Canto is wildly successful there could be sufficient pairs that this would fail, I think Medium is a reasonable severity.

[M-02] Calculated `token0TVL` may be zero under certain scenarios

Submitted by hickuphh3, also found by 0xNazgul, 0xSky, CertoraInc, Deivitto, hansfriese, Jeiwan, linmiaomiao, rbserver, and SinceJuly

uint token0TVL = assetReserves[i] * (prices[i] / decimals);

Because of the brackets, the division of prices[i] / decimals is executed before multiplication, causing token0TVL to potentially be zero.

Proof of Concept

Add the following test in oracle.test.ts. Note: getPriceLP() should have its visibility changed from internal to public as the test relies on it.

To summarise what the test is doing, a stablecoin of 24 decimals is deployed, whose address will be greater than the note address so that token0 = note. It will enter the following case:

if (pair.stable()) { // stable pairs will be priced in terms of Note
  if (token0 == note) { //token0 is the unit, token1 will be priced with respect to this asset initially
      decimals = 10 ** (erc20(token1).decimals()); // we must normalize the price of token1 to 18 decimals
      prices = pair.sample(token1, decimals, 8, 1);
      (unitReserves, assetReserves) = pair.sampleReserves(8, 1);

such that the prices’s denomination is smaller than the stablecoin’s decimals of 24.

To see the difference in test results, apply the recommended fix after running the test once. In essence, the LP’s price will double from 999500000001499 to 1999999998838589, which is expected since the LP token should be worth the combined value of both stablecoins.

it.only("will have 0 token0TVL", async () => {
  // NOTE: change getPriceLP() from internal to public so that function can be called
  let tokenFactory = await ethers.getContractFactory("ERC20", dep)
  let stablecoin = await tokenFactory.deploy("STABLE","STABLE",ethers.utils.parseUnits("100000", "24"), 24)
  await stablecoin.deployed()
  // we want note to be token0
  // redeploy till it is
  while (stablecoin.address < note.address) {
      stablecoin = await tokenFactory.deploy("STABLE","STABLE",ethers.utils.parseUnits("100000", "24"), 24)
      await stablecoin.deployed()
  }
  // give token approvals to router
  let noteIn = ethers.utils.parseUnits("10000", "18")
  let stableIn = ethers.utils.parseUnits("10000", "24")
  await (await note.approve(router.address, ethers.constants.MaxUint256)).wait()
  await (await stablecoin.approve(router.address, ethers.constants.MaxUint256)).wait()

  // borrow note
  await (await comptroller._supportMarket(cUsdc.address)).wait()
  // set collateral factors for cCanto 
  await (await comptroller._setCollateralFactor(cUsdc.address, ethers.utils.parseUnits("0.9", "18"))).wait()
  // borrow note against usdc 
  await (await comptroller.enterMarkets([cUsdc.address, cNote.address])).wait()
  await (await usdc.approve(cUsdc.address, ethers.utils.parseUnits("1000"))).wait()
  // supply usdc
  await (await cUsdc.mint(ethers.utils.parseUnits("100000000", "6"))).wait()
  // borrow note
  await (await cNote.borrow(ethers.utils.parseUnits("9000000", "18"))).wait()

  // add liquidity
  await (await router.addLiquidity(
      note.address,
      stablecoin.address,
      true,
      noteIn,
      stableIn,
      0,
      0,
      dep.address,
      9999999999,
      )).wait()
  // get pair address
  let pairAddr = await factory.getPair(note.address, stablecoin.address, true)
  pair = await ethers.getContractAt("BaseV1Pair", pairAddr)

  //set period size to zero for instant observations
  await (await factory.setPeriodSize(0)).wait()

  // swap 10 times for price observations
  for(var i = 0; i < 10; i++) {
      if (i % 2) {
          //swap 0.01 note for stable
          await (await router.swapExactTokensForTokensSimple(
              ethers.utils.parseUnits("10", "18"),
              0,
              note.address,
              stablecoin.address,
              true,
              dep.address,
              9999999999999
          )).wait()
      } else {
          //swap stable for note
          await (await router.swapExactTokensForTokensSimple(
              ethers.utils.parseUnits("10", "24"),
              0,
              stablecoin.address,
              note.address,
              true,
              dep.address,
              9999999999999
          )).wait()
      }
  }
  // check lpToken price
  // Actual price calculated is 999500000001499
  // But expected price (after removing brackets) is 1999999998838589
  console.log((await router.getPriceLP(pairAddr)).toString());
});

Recommended Mitigation Steps

- uint token0TVL = assetReserves[i] * (prices[i] / decimals);
+ uint token0TVL = assetReserves[i] * prices[i] / decimals;

nivasan1 (Canto) confirmed

0xean (judge) decreased severity to Medium

[M-03] Hackers can deploy token with respective name as the stable one to impersonate the stable token

Submitted by Chom, also found by 0xSmartContract, cccz, Jeiwan, linmiaomiao, SinceJuly, and V_B

Hackers can deploy tokens with respective names as the stable ones to impersonate the stable token. Then hackers can get profit from the malicious price oracle.

Proof of Concept

        string memory symbol = ctoken.symbol();
        if (compareStrings(symbol, "cCANTO")) {
            underlying = address(wcanto);
            return getPriceNote(address(wcanto), false);
        } else {
            underlying = address(ICErc20(address(ctoken)).underlying()); // We are getting the price for a CErc20 lending market
        }
        //set price statically to 1 when the Comptroller is retrieving Price
        if (compareStrings(symbol, "cNOTE")) { // note in terms of note will always be 1 
            return 1e18; // Stable coins supported by the lending market are instantiated by governance and their price will always be 1 note
        } 
        else if (compareStrings(symbol, "cUSDT") && (msg.sender == Comptroller )) {
            uint decimals = erc20(underlying).decimals();
            return 1e18 * 1e18 / (10 ** decimals); //Scale Price as a mantissa to maintain precision in comptroller
        } 
        else if (compareStrings(symbol, "cUSDC") && (msg.sender == Comptroller)) {
            uint decimals = erc20(underlying).decimals();
            return 1e18 * 1e18 / (10 ** decimals); //Scale Price as a mantissa to maintain precision in comptroller
        }

If hackers or malicious admin deploy a non-stable token but has “cNOTE”, “cUSDT”, or “cUSDC” as symbols, these tokens will act as a stable token while in fact, it isn’t.

Recommended Mitigation Steps

Use fixed address whitelisting instead for example if (address(ctoken) == cUSDC_address) ... where cUSDC_address is an immutable variable set on the constructor.

tkkwon1998 (Canto) disputed and commented:

The warden is saying that malicious parties could deploy a token with the same name to impersonate other tokens, but that these tokens will use the same pricing methodology as the token it is impersonating.

However, as this is an open EVM, anyone could deploy any token name with any underlying price method. I fail to see how this would be an issue, since everything is open source and users can see what they are doing.

0xean (judge) commented:

What is the benefit the sponsor is trying to achieve by comparing a non unique string compared to a unique address?

While everything is open source, it does seem like this is a pretty bad design choice when compared to the alternative solutions.

nivasan1 (Canto) commented:

@0xean, the design choice presented here prevents from having multiple dependencies in the initialization of the oracle. Furthermore, the tokens that are referenced here must be supported by governance, so to override the actual prices would require a >51% voting power. As such, even if the exploit exists it is essentially impossible. As such, we do not believe that this is a high / med -risk issue.

0xean (judge) decreased severity to Medium and commented:

Will downgrade to Medium as there are several external factors for this to become an issue.

[M-04] Period Size not updated on creating new Pair

Submitted by csanuragjain

The period size is not updated to current while creating a new pair. This means even if period size has been reduced from default value, this new pair will still point to the higher default value.

Proof of Concept

Assume Pair P1,P2 exists in BaseV1Factory with default period size as 1800
Admin decides to decrease the period size to 900 using setPeriodSize function

function setPeriodSize(uint newPeriod) external {
        require(msg.sender == admin);
        require(newPeriod <= MaxPeriod);

        for (uint i; i < allPairs.length; ) {
            BaseV1Pair(allPairs[i]).setPeriodSize(newPeriod);
            unchecked {++i;}
        }
    }

This changes period size of P1, P2 to 900
Admin creates a new Pair P3 using createPair function

function createPair(address tokenA, address tokenB, bool stable) external returns (address pair) {
        require(tokenA != tokenB, "IA"); // BaseV1: IDENTICAL_ADDRESSES
        (address token0, address token1) = tokenA < tokenB ? (tokenA, tokenB) : (tokenB, tokenA);
        require(token0 != address(0), "ZA"); // BaseV1: ZERO_ADDRESS
        require(getPair[token0][token1][stable] == address(0), "PE"); // BaseV1: PAIR_EXISTS - single check is sufficient
        bytes32 salt = keccak256(abi.encodePacked(token0, token1, stable)); // notice salt includes stable as well, 3 parameters
        (_temp0, _temp1, _temp) = (token0, token1, stable);
        pair = address(new BaseV1Pair{salt:salt}());
        getPair[token0][token1][stable] = pair;
        getPair[token1][token0][stable] = pair; // populate mapping in the reverse direction
        allPairs.push(pair);
        isPair[pair] = true;
        emit PairCreated(token0, token1, stable, pair, allPairs.length);
    }

A new Pair is created but the period size is not updated which means P3’s period size will be 1800 instead of 900 which is incorrect

Recommended Mitigation Steps

Add a new variable which stores the updated period size. Once a pair is created, update its period size using this new variable:

uint periodSizeUpdated=1800;

function setPeriodSize(uint newPeriod) external {
        ...
periodSizeUpdated=newPeriod;
    }

function createPair(address tokenA, address tokenB, bool stable) external returns (address pair) {
...
BaseV1Pair(pair).setPeriodSize(newPeriod);

}

nivasan1 (Canto) confirmed

[M-05] `getUnderlyingPrice()` should return `0` when errored

Submitted by Critical

The Comptroller is expecting oracle.getUnderlyingPrice to return 0 for errors (Compound style returns, no revert). The current implementation will throw errors, resulting in the consumer of the oracle getting unexpected errors.

Proof of Concept

function getUnderlyingPrice(CToken ctoken) external override view returns(uint) {
         address underlying;
        { //manual scope to pop symbol off of stack
        string memory symbol = ctoken.symbol();
        if (compareStrings(symbol, "cCANTO")) {
            underlying = address(wcanto);
            return getPriceNote(address(wcanto), false);
        } else {
            underlying = address(ICErc20(address(ctoken)).underlying()); // We are getting the price for a CErc20 lending market
        }
        //set price statically to 1 when the Comptroller is retrieving Price
        if (compareStrings(symbol, "cNOTE")) { // note in terms of note will always be 1 
            return 1e18; // Stable coins supported by the lending market are instantiated by governance and their price will always be 1 note
        } 
        else if (compareStrings(symbol, "cUSDT") && (msg.sender == Comptroller )) {
            uint decimals = erc20(underlying).decimals();
            return 1e18 * 1e18 / (10 ** decimals); //Scale Price as a mantissa to maintain precision in comptroller
        } 
        else if (compareStrings(symbol, "cUSDC") && (msg.sender == Comptroller)) {
            uint decimals = erc20(underlying).decimals();
            return 1e18 * 1e18 / (10 ** decimals); //Scale Price as a mantissa to maintain precision in comptroller
        }
        }
        
        if (isPair(underlying)) { // this is an LP Token
            return getPriceLP(IBaseV1Pair(underlying));
        }
        // this is not an LP Token
        else {
            if (isStable[underlying]) {
                return getPriceNote(underlying, true); // value has already been scaled
            }

            return getPriceCanto(underlying) * getPriceNote(address(wcanto), false) / 1e18;
        }   
    }

The Comptroller is expecting oracle.getUnderlyingPrice to return 0 for errors (Compound style returns, no revert).

However, the current implementation will revert when errored:

https://github.com/code-423n4/2022-09-canto/blob/65fbb8b9de22cf8f8f3d742b38b4be41ee35c468/src/Swap/BaseV1-periphery.sol#L549-L593

function getPriceLP(IBaseV1Pair pair) internal view returns(uint) {
        uint[] memory supply = pair.sampleSupply(8, 1);
        uint[] memory prices; 
        uint[] memory unitReserves; 
        uint[] memory assetReserves; 
        address token0 = pair.token0();
        address token1 = pair.token1();
        uint decimals;

https://github.com/code-423n4/2022-09-canto/blob/65fbb8b9de22cf8f8f3d742b38b4be41ee35c468/src/Swap/BaseV1-core.sol#L271-L289

function sampleSupply(uint points, uint window) public view returns (uint[] memory) {
        uint[] memory _totalSupply = new uint[](points);
        
        uint lastIndex = observations.length-1;
        require(lastIndex >= points * window, "PAIR::NOT READY FOR PRICING");
        uint i = lastIndex - (points * window); // point from which to begin the sample
        uint nextIndex = 0;
        uint index = 0;
        uint timeElapsed;

        for(; i < lastIndex; i+=window) {
            nextIndex = i + window;
            timeElapsed = observations[nextIndex].timestamp - observations[i].timestamp;
            _totalSupply[index] = (observations[nextIndex].totalSupplyCumulative - observations[i].totalSupplyCumulative) / timeElapsed;
            index = index + 1;
        }

        return _totalSupply;
    }

Recommended Mitigation Steps

Consider using try catch and return 0 when errored.

nivasan1 (Canto) confirmed

[M-06] System is Vulnerable to Downtime and has no Checks for it

Submitted by Respx

https://github.com/code-423n4/2022-09-canto/blob/65fbb8b9de22cf8f8f3d742b38b4be41ee35c468/src/Swap/BaseV1-core.sol#L224-L258

https://github.com/code-423n4/2022-09-canto/blob/65fbb8b9de22cf8f8f3d742b38b4be41ee35c468/src/Swap/BaseV1-core.sol#L271-L289

https://github.com/code-423n4/2022-09-canto/blob/65fbb8b9de22cf8f8f3d742b38b4be41ee35c468/src/Swap/BaseV1-core.sol#L187-L194

https://github.com/code-423n4/2022-09-canto/blob/65fbb8b9de22cf8f8f3d742b38b4be41ee35c468/src/Swap/BaseV1-core.sol#L201-L222

https://github.com/code-423n4/2022-09-canto/blob/65fbb8b9de22cf8f8f3d742b38b4be41ee35c468/src/Swap/BaseV1-periphery.sol#L487-L593

Description

There is insufficient resilience in the design for the case where there has been no call to _update() for a long time. Consider these possible scenarios:

A denial of service attack on the blockchain has prevented transactions occurring for a significant period of time.
An extreme spike in gas prices has prevented transactions occurring for a significant period of time.
Some unforeseen technical error takes the blockchain down, perhaps during an upgrade or fork.

In any of these scenarios, it is possible that the price of any non-stablecoin token might be prone to serious volatility, $CANTO in particular.

The system has no provision for this issue.

Impact

Consider the following attack scenario:

Assume a period of network downtime, perhaps a DOS attack.
Assume a large drop in the price of $CANTO during this time.
Assume attacker is able to queue a transaction to be executed as soon as network service resumes (perhaps through producing a block themselves or high gas pricing). This transaction uses a lending system that relies on this oracle, and that lending system calls reserves() to calculate the TWAP price of $CANTO. The values returned are out of date and far too high. The attacker is then able to borrow stablecoins against their $CANTO at too high a rate.

Proof of Concept

https://github.com/code-423n4/2022-09-canto/blob/65fbb8b9de22cf8f8f3d742b38b4be41ee35c468/src/Swap/BaseV1-core.sol#L224-L258

https://github.com/code-423n4/2022-09-canto/blob/65fbb8b9de22cf8f8f3d742b38b4be41ee35c468/src/Swap/BaseV1-core.sol#L271-L289

reserves(), sampleReserves() and sampleSupply() make no use of block.timestamp. They all measure only the time duration of the observations. There is no awareness of how much time has passed since the most recent observation was made.

https://github.com/code-423n4/2022-09-canto/blob/65fbb8b9de22cf8f8f3d742b38b4be41ee35c468/src/Swap/BaseV1-core.sol#L187-L194

https://github.com/code-423n4/2022-09-canto/blob/65fbb8b9de22cf8f8f3d742b38b4be41ee35c468/src/Swap/BaseV1-core.sol#L201-L222

https://github.com/code-423n4/2022-09-canto/blob/65fbb8b9de22cf8f8f3d742b38b4be41ee35c468/src/Swap/BaseV1-periphery.sol#L487-L593

quote() and sample() have the same logic, and these functions are called in getPriceCanto() and getPriceNote(). getPriceLP() relies on sampleReserves(). They therefore have the same issue.

Recommended Mitigation Steps

The system could track the average duration time of observations and, if any of the observations in a sample are significantly greater than this average, the system could either refuse to return a sample, or could return a warning flag to indicate that the sample data could be unreliable.

There is precedent in the system for refusing to return a sample (see line 242 of BaseV1-core.sol).

nivasan1 (Canto) disputed and commented:

The oracle has been designed specifically for the purpose of use in the lending market, for pairs that have seen a long period of down-time (which is highly unexpected for supported pairs) the collateral factors can be adjusted to scale the price of the asset’s collateral value downwards to reflect the volatility after the long period of downtime.

0xean (judge) decreased severity to Medium and commented:

This has a high level of external factors that are required to be realized but knowing that the CANTO network has already suffered downtime, I don’t think these are too far out of the realm of possibility. Downgrading to Medium.

Low Risk and Non-Critical Issues

For this contest, 51 reports were submitted by wardens detailing low risk and non-critical issues. The report highlighted below by lukris02 received the top score from the judge.

The following wardens also submitted reports: p_crypt0, Dravee, hickuphh3, Deivitto, ajtra, Bnke0x0, Rolezn, tnevler, fatherOfBlocks, rvierdiiev, rbserver, ReyAdmirado, 0xNazgul, erictee, oyc_109, 0x52, Chom, Tomo, gogo, cryptphi, CodingNameKiki, SinceJuly, 0x1f8b, peritoflores, TomJ, 0xA5DF, codexploder, Bronicle, ignacio, Jeiwan, hansfriese, a12jmx, hake, R2, rokinot, RaymondFam, 0xSky, ontofractal, pashov, csanuragjain, Diraco, rajatbeladiya, CertoraInc, ak1, JansenC, Yiko, IgnacioB, 0x040, EthLedger, JC.

Summary

№	Title	Risk Rating	Instance Count
L‑01	Large number of observations may cause out-of-gas error	Low	2
L‑02	Incorrect comment	Low	1
L‑03	Misleading comment	Low	1
N‑01	Order of Functions	Non-Critical	5
N‑02	Maximum line length exceeded	Non-Critical	2+
N‑03	Constants may be used	Non-Critical	18
N‑04	Inconsistent comment spacing and location	Non-Critical	1
N‑05	Loop parameter may be changed for clarity	Non-Critical	2
N‑06	Functions without comments	Non-Critical	4
N‑07	Require statement may be placed before allocating memory for arrays	Non-Critical	2
N‑08	Check zero denominator	Non-Critical	2
N‑09	Missing check for input variables	Non-Critical	2

[L-01] Large number of observations may cause out-of-gas error

Loops that do not have a fixed number of iterations, for example, loops that depend on storage values, have to be used carefully: Due to the block gas limit, transactions can only consume a certain amount of gas. Either explicitly or just due to normal operation, the number of iterations in a loop can grow beyond the block gas limit, which can cause the complete contract to be stalled at a certain point.

Instances

for(; i < lastIndex; i+=window) { (function sampleReserves)
for(; i < lastIndex; i+=window) { (function sampleSupply)

Recommendation

Restrict the maximum number of sample observations (points).

[L-02] Incorrect comment

// note in terms of note will always be 1

Recommendation

Probably the comment should be like this “price in terms of note will always be 1”.

[L-03] Misleading comment

The comment is misleading, and there is an extra comma and an empty comment line.

Instances

Link:

        for (uint i = 0; i < _reserves0.length; ++i) {
            reserveAverageCumulative0 += _reserves0[i]; //normalize the reserves for TWAP LP Oracle pricing, 
            reserveAverageCumulative1 += _reserves1[i]; //
        }

Recommendation

Change or delete comment.

[N-01] Order of Functions

Some internal functions are between public, some external functions are between public, and some public functions are between external.

Instances

Recommendation

According to Style Guide, ordering helps readers identify which functions they can call and to find the constructor and fallback definitions easier.

Functions should be grouped according to their visibility and ordered:

constructor
receive function (if exists)
fallback function (if exists)
external
public
internal
private

[N-02] Maximum line length exceeded

Some lines of code are too long.

Instances

observations.push(Observation(blockTimestamp, reserve0CumulativeLast, reserve1CumulativeLast, totalSupplyCumulativeLast));
_totalSupply[index] = (observations[nextIndex].totalSupplyCumulative - observations[i].totalSupplyCumulative) / timeElapsed;
and more, if you take into account the beginning indent and / or comments.

Recommendation

According to Style Guide, maximum suggested line length is 120 characters.

Make the lines shorter.

[N-03] Constants may be used

Constants may be used instead of literal values.

Instances

Recommendation

Define constant variables for repeated values (8 and 1e18).

[N-04] Inconsistent comment spacing and location

Some comments are above the line of code and some next to it.

Some comments are indented between // and the comment text, some are not.

Instances

Link:

{ //manual scope to pop symbol off of stack
 string memory symbol = ctoken.symbol();

//set price statically to 1 when the Comptroller is retrieving Price
if (compareStrings(symbol, "cNOTE")) { // note in terms of note will always be 1 
    return 1e18; // Stable coins supported by the lending market are instantiated by governance and their price will always be 1 note

return 1e18 * 1e18 / (10 ** decimals); //Scale Price as a mantissa to maintain precision in comptroller
all other functions…

Recommendation

Use consistent comment spacing and location.

[N-05] Loop parameter may be changed for clarity

In loop are used _reserves0.length. It is equal to input variable granularity. It can be clearer and more consistent if you use an input variable in the loop.

Instances

Link:

    function reserves(uint granularity) external view returns(uint, uint) {
        (uint[] memory _reserves0, uint[] memory _reserves1)= sampleReserves(granularity, 1);
        uint reserveAverageCumulative0;
        uint reserveAverageCumulative1;

        for (uint i = 0; i < _reserves0.length; ++i) {

Link:

    function totalSupplyAvg(uint granularity) external view returns(uint) {
        uint[] memory _totalSupplyAvg = sampleSupply(granularity, 1);
        uint totalSupplyCumulativeAvg;

        for (uint i = 0; i < _totalSupplyAvg.length; ++i) {

Recommendation

Change to

    function reserves(uint granularity) external view returns(uint, uint) {
        (uint[] memory _reserves0, uint[] memory _reserves1)= sampleReserves(granularity, 1);
        uint reserveAverageCumulative0;
        uint reserveAverageCumulative1;
        
        //HERE
        for (uint i = 0; i < granularity; ++i) {

Change to

    function totalSupplyAvg(uint granularity) external view returns(uint) {
        uint[] memory _totalSupplyAvg = sampleSupply(granularity, 1);
        uint totalSupplyCumulativeAvg;

        //HERE
        for (uint i = 0; i < granularity; ++i) {

[N-06] Functions without comments

Some functions do not have comments describing them.

Instances

Recommendation

Add comments.

[N-07] Require statement may be placed before allocating memory for arrays

Instances

Link:

        uint[] memory _reserves0 = new uint[](points);
        uint[] memory _reserves1 = new uint[](points);
        
        uint lastIndex = observations.length-1;
        require(lastIndex >= points * window, "PAIR::NOT READY FOR PRICING");

Link:

        uint[] memory _totalSupply = new uint[](points);
        
        uint lastIndex = observations.length-1;
        require(lastIndex >= points * window, "PAIR::NOT READY FOR PRICING");

Recommendation

Change to

        uint lastIndex = observations.length-1;
        require(lastIndex >= points * window, "PAIR::NOT READY FOR PRICING");

        uint[] memory _reserves0 = new uint[](points);
        uint[] memory _reserves1 = new uint[](points);

Change to

        uint lastIndex = observations.length-1;
        require(lastIndex >= points * window, "PAIR::NOT READY FOR PRICING");
        
        uint[] memory _totalSupply = new uint[](points);

[N-08] Check zero denominator

If the input parameter is equal to zero, this will cause the function call failure on division.

Instances

Recommendation

Add the check to prevent function call failure.

[N-09] Missing check for input variables

If input variable points== 0, function will return empty array.

More critical, if input variable window== 0, function will return array with default values, which may lead to further incorrect calculations.

Instances

Recommendation

Add require statement or custom error - points!= 0 && window!= 0.

Disclosures

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.

Canto Dex Oracle contest Findings & Analysis Report

2023-03-31

Table of contents

Overview

About C4

Wardens

Summary

Scope

Severity Criteria

High Risk Findings (1)

[H-01] Hardcoded USD pegs can be broken

Impact

Recommended Mitigation Steps

Medium Risk Findings (6)

[M-01] unbounded loop length dos

[M-02] Calculated token0TVL may be zero under certain scenarios

Proof of Concept

Recommended Mitigation Steps

[M-03] Hackers can deploy token with respective name as the stable one to impersonate the stable token

Proof of Concept

Recommended Mitigation Steps

[M-04] Period Size not updated on creating new Pair

Proof of Concept

Recommended Mitigation Steps

[M-05] getUnderlyingPrice() should return 0 when errored

Proof of Concept

Recommended Mitigation Steps

[M-06] System is Vulnerable to Downtime and has no Checks for it

Description

Impact

Proof of Concept

Recommended Mitigation Steps

Low Risk and Non-Critical Issues

Summary

[L-01] Large number of observations may cause out-of-gas error

Instances

Recommendation

[L-02] Incorrect comment

Recommendation

[L-03] Misleading comment

Instances

Recommendation

[N-01] Order of Functions

Instances

Recommendation

[N-02] Maximum line length exceeded

Instances

Recommendation

[N-03] Constants may be used

Instances

Recommendation

[N-04] Inconsistent comment spacing and location

Instances

Recommendation

[N-05] Loop parameter may be changed for clarity

Instances

Recommendation

[N-06] Functions without comments

Instances

Recommendation

[N-07] Require statement may be placed before allocating memory for arrays

Instances

Recommendation

[N-08] Check zero denominator

Instances

Recommendation

[N-09] Missing check for input variables

Instances

Recommendation

Disclosures

Canto Dex Oracle contest
Findings & Analysis Report

[M-02] Calculated `token0TVL` may be zero under certain scenarios

[M-05] `getUnderlyingPrice()` should return `0` when errored