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Reproduced Exploit

Liquidator can increase a position while liquidating — AuditVault synthetic reduction

This bug report is about a vulnerability found in the Market contract of the Perennial Protocol. The vulnerability allows a malicious liquidator to liquidate a user while increasing their position to any value, including the maximum possible value of 2^62-1, which would result in all users losing a…

Oct 2023•Other•logic•4 min read

Chain

Other

Category

logic

Date

Oct 2023

Source

AuditVault

PoC & write-upPoC for your local evm-hack-analyzerAuditVault PoCs

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Source & credit. Reproduction of a public audit finding curated by AuditVault — the original finding: 28948-h-1-liquidator-can-liquidate-user-while-increasing-user-posi. Standalone Foundry PoC and full write-up: 28948-h-1-liquidator-can-liquidate-user-while-increasing-user-posi_exp in the evm-hack-registry mirror.

Vulnerability classes: vuln/logic/liquidation-logic · vuln/input-validation/missing

Reproduction: self-contained Foundry PoC with an offline synthetic contract. Full trace: output.txt.

AuditVault finding: 28948 · H-1: Liquidator can liquidate user while increasing user position to any value, stealing all Market funds or bricking the contract

Key info#

ImpactHIGH — Liquidator can increase a position while liquidating
Protocol[[Perennial]]
FindingAuditVault #28948
Reporthttps://github.com/sherlock-audit/2023-10-perennial-judging
SourceAuditVault finding
Compiler^0.8.24 (synthetic reduction)
LossReduced invariant reproduced; no live funds moved
Attacker EOAConfigured synthetic caller
Attack contractExploit
Attack txLocal Foundry Exploit.attack() call
Chain · block · dateEthereum model · block 1 · synthetic
Vulnerable contractLocal synthetic vulnerable contract in test/
Bug classSee vulnerability-class tags above

TL;DR#

This bug report is about a vulnerability found in the Market contract of the Perennial Protocol. The vulnerability allows a malicious liquidator to liquidate a user while increasing their position to any value, including the maximum possible value of 2^62-1, which would result in all users losing all funds deposited into the Market. The vulnerability is caused by the fact that the closable value is calculated as the maximum possible position size that can be closed even if some pending position updates are invalidated due to an invalid oracle version. This means that it is possible for the user to have closable = 0 while having the new (current) position size of any amount, which makes it possible for the malicious liquidator to liquidate the user while increasing their position size to any value. Proof of concept code was provided to demonstrate the scenario, and a recommendation of

Background#

The upstream report is a Solidity finding. This page keeps the vulnerable statement and demonstrates its security consequence in a small, deterministic EVM model; no live RPC or external dependencies are required.

The vulnerable code#

SOLIDITY
// The exact vulnerable pattern is retained in test/28948-h-1-liquidator-can-liquidate-user-while-increasing-user-posi.sol.
// @> see the marked statement in the synthetic reduction

Root cause#

The caller-controlled input or stale state is trusted before the required uniqueness, bounds, authorization, accounting, or reentrancy invariant is enforced. The marked line in the synthetic contract intentionally preserves that ordering so the assertion is executable.

Preconditions#

  • The vulnerable contract is deployed with the state described by the report.
  • The attacker can reach the affected entry point (or submit the report's crafted input).

Attack walkthrough#

  1. Exploit.run() initializes the minimal state from the report.
  2. The marked vulnerable operation executes without its required check.
  3. The contract records the resulting invariant violation and emits a Proof event.
  4. The test asserts the harm; the passing trace is recorded at output.txt:4.

Diagrams#

flowchart TD A[Attacker supplies crafted input] --> B[Vulnerable operation] B --> C{Missing invariant check} C --> D[Security impact demonstrated]
sequenceDiagram participant A as Attacker participant V as Vulnerable contract participant S as State A->>V: invoke affected entry point V->>S: apply unchecked update S-->>A: harm is observable

Remediation#

Apply the invariant before mutating state: accrue interest before adding principal; reject duplicate signers; use checked casts and bounded lengths; validate token/target/DAO identities; use nonReentrant; enforce slippage and fee equality; and validate the canonical authority or ownership relationship described by the report.

How to reproduce#

BASH
cd evm-hack-registry/28948-h-1-liquidator-can-liquidate-user-while-increasing-user-posi_exp
forge test -vvvvv

The test is offline and uses only the shared forge-std library. The corresponding Playground bundle is generated from scripts/poc-configs/28948-h-1-liquidator-can-liquidate-user-while-increasing-user-posi.mjs.

Sources#

Reference: https://github.com/sherlock-audit/2023-10-perennial-judging

Sources & further analysis#

Reproductions & code

Alerts & third-party analyses

  • Web3Sec X hacked database: search.
  • Rekt leaderboard: search.
  • Solodit incident search: search.

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