RAAC: redeeming 100 ZENO pays 0.0001 USDC and leaves 99.9999 USDC in the contract

Source & credit. Reproduction of a public audit finding curated by AuditVault — the original finding: 57151-zeno-token-redemption-returns-negligible-usdc-amount-compare. Standalone Foundry PoC and full write-up: 57151-zeno-token-redemption-returns-negligible-usdc-amount-compare_exp in the evm-hack-registry mirror.

Vulnerability classes: vuln/arithmetic/decimal-mismatch · vuln/logic/price-calculation

Key info#

Field	Value
Loss	Holder paid 9,999.8959 USDC for 100 bonds and is paid 100 USDC base units. 99.9999 USDC of face value stays in ZENO
Vulnerable contract	`Zeno.redeem`
Attacker EOA	`0x1111111111111111111111111111111111111111`
Attack contract	`Exploit`
Attack tx	`Exploit.run()`
Chain / block / date	Ethereum model · block 0 · 2025-02
Compiler	solc 0.8.27, cancun, via IR
Bug class	Whole-bond amount is transferred as 6-decimal USDC units

TL;DR#

A ZENO balance is a count of bonds. USDC has 6 decimals. redeem burns amount bonds and safeTransfers that same integer of USDC. Buying 100 bonds costs 9,999.8959 USDC, the number in the CodeHawks test. At maturity the contract holds 100 USDC of face value and pays 100 base units, which is 0.0001 USDC. The buyer is left with 0.1042 USDC. Scaling the payout with amount * 10**6 pays the 100 USDC and empties the reserve.

Background#

CodeHawks contest 2025-02-raac (3–24 February 2025). The report is "ZENO Token Redemption Returns Negligible USDC Amount Compared to Purchase Price" by victortheoracle. The recommended fix is uint256 usdcAmount = amount * (10 ** 6).

The vulnerable code#

SOLIDITY

function redeem(uint256 amount) external {
    if (block.timestamp < maturity) revert BondNotRedeemable();
    _burn(msg.sender, amount);
    uint256 usdcBalance = USDC.balanceOf(address(this));
    if (usdcBalance < amount) revert InsufficientBalance();
    // @> VULN: pays `amount` USDC base units instead of amount * 10**6, so 100 ZENO returns 0.0001 USDC
    USDC.safeTransfer(msg.sender, amount);
}

The balance check compares the reserve to amount (100), not to amount * 10**6 (100_000_000), so the dust transfer succeeds.

Root cause#

The bond count and the USDC base unit are treated as the same integer. One bond of face value is 1 USDC, which is 10**6 base units, not 1.

Preconditions#

The auction price is 99.998959 USDC per bond, so 100 bonds cost 9,999.8959 USDC.
Maturity has passed. The ZENO contract holds 100 USDC, the face reserve.
The holder calls redeem(100).

Attack walkthrough#

buy(100) pulls 9,999.8959 USDC to the business account and mints 100 bonds.
100 USDC is minted onto the ZENO contract.
redeem(100) burns the bonds.
safeTransfer sends 100 base units. returned is 100. The contract still holds 99,999,900 base units.
The holder's USDC balance is 104,200, which is 0.1042 USDC.
The control pays amount * 10**6. The holder receives 100 USDC and the reserve is 0.

Diagrams#

flowchart TD A["Buyer pays 9999.8959 USDC for 100 ZENO"] --> B["ZENO is funded with 100 USDC of face value"] B --> C["redeem burns 100 bonds"] C --> D["VULN safeTransfer sends 100 USDC base units"] D --> E["99.9999 USDC stays in ZENO and the buyer holds 0.1042 USDC"] C --> F["Control pays amount times 10 to the 6"] F --> G["Control buyer receives 100 USDC and the reserve is empty"]

Impact#

The holder does not receive the 1 USDC per bond the redemption is supposed to pay. Of the 100 USDC face reserve, 99.9999 USDC never leaves the contract. Against the 9,999.8959 USDC purchase, the holder is left with 0.1042 USDC. The control pays the full 100 USDC face value.

Remediation#

Set usdcAmount = amount * (10 ** 6) and transfer usdcAmount, and compare the reserve to usdcAmount rather than to amount.

How to reproduce#

BASH

cd 57151-zeno-token-redemption-returns-negligible-usdc-amount-compare_exp
forge test -vv

test_exploit_redeem_pays_100_usdc_units_instead_of_100_usdc asserts a 100-unit payout and 99.9999 USDC retained. test_control_scaled_redeem_pays_100_usdc asserts a 100 USDC payout and an empty reserve. Captured output is output.txt.

Sources#

AuditVault finding: https://github.com/Auditware/AuditVault/blob/main/findings/57151-zeno-token-redemption-returns-negligible-usdc-amount-compare.md
CodeHawks contest: https://codehawks.cyfrin.io/c/2025-02-raac
Submission: https://codehawks.cyfrin.io/c/2025-02-raac/s/290

Sources & further analysis#

Reproductions & code

Standalone PoC + full trace: 57151-zeno-token-redemption-returns-negligible-usdc-amount-compare_exp (evm-hack-registry mirror).
AuditVault finding: 57151-zeno-token-redemption-returns-negligible-usdc-amount-compare.

Alerts & third-party analyses

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