Harmonix FundContract — first depositor inflates the share price and takes the next deposit

Source & credit. Reproduction of a public audit finding curated by AuditVault — the original finding: 57883-c-01-first-depositor-can-inflate-share-price-to-steal-funds. Standalone Foundry PoC and full write-up: 57883-c-01-first-depositor-can-inflate-share-price-to-steal-funds_exp in the evm-hack-registry mirror.

Vulnerability classes: vuln/arithmetic/rounding · vuln/logic/price-calculation

Key info#


Protocol	Harmonix Finance (Hyperliquid vault)
Finding	Shieldify C-01, AuditVault 57883
Vulnerable code	`FundContract._updateNav`
Harm	Second depositor's share balance is 0; attacker profit is that depositor's 100 assets
Chain	local synthetic

TL;DR#

Share price is nav * 10**decimals / totalSupply, with no virtual offset. The attacker deposits 2 wei, withdraws 1 share, and donates 1,000 assets straight into the balance contract. Supply is 1 share. NAV is about 1,000. The next depositor sends 100 assets and receives 0 shares. The attacker redeems the remaining share and is paid the donation back plus the 100. Net profit is 100. The victim's share balance stays 0.

The control adds a virtual offset of 1,000 shares in the conversion. The same second deposit mints 299 shares instead of 0.

The vulnerable code#

SOLIDITY

uint256 nav = getFundNavValue() +
    asset.balanceOf(balanceContract) +
    withdrawPoolAmount -
    excludedTradingFee;
// @> VULN: price is nav / supply with no virtual offset.
uint256 newPricePerShare = (nav * 10 ** decimals()) / totalSupply();

A direct transfer to balanceContract increases nav and does not mint shares. The warden's mitigation is to mint 10**3 dead shares (a virtual offset) so this division cannot be pushed to zero for a normal deposit.

Root cause#

deposit on an empty vault mints one share per wei of assets. After that, price is a plain ratio of the balance-contract balance to totalSupply. Donating assets is not a deposit, so the ratio moves without a matching share mint. The next depositor's share amount rounds down to 0, and the existing shareholder owns 100% of the new balance.

Preconditions#

The vault supply can be 1 wei of shares. The asset is a normal ERC-20 the attacker can transfer directly to the balance contract. No admin, no oracle, and no time delay. The victim's deposit is smaller than the inflated price of one share.

Attack walkthrough#

Attacker deposits 2 wei. The empty vault mints 2 shares and prices them one-to-one.
Attacker withdraws 1 share. 1 share and 1 wei remain. _updateNav computes price as nav / supply.
Attacker transfers 1,000 assets to the balance contract. Supply stays 1. NAV becomes 1,000e18 + 1.
The second depositor deposits 100 assets. Shares round to 100e18 / (1000e18 + 1 + 100e18) = 0.
sharesOf for the victim is 0. The 100 assets are in the balance contract.
Attacker withdraws the last share and receives 1,100e18 + 1. Against a starting balance that included the 1,000 donation, the profit is exactly 100.

The control uses shares = assets * (supply + 1000) / (assetsBefore + 1). The same 2 wei mint 2,000 shares. After the same 1,000 donation, the 100-asset deposit mints 299 shares.

Diagrams#

flowchart TD A["Attacker deposits 2 wei and receives 2 shares"] --> B["Withdraws 1 share and leaves 1 wei"] B --> C["Donates 1000 assets into the balance contract"] C --> D["VULN: price equals nav divided by 1 share"] D --> E["Second depositor sends 100 assets"] E --> F["Share mint rounds to 0"] F --> G["Attacker redeems 1 share and profits 100"]

Impact#

The second depositor loses the full 100 assets. Their share balance is 0, so they cannot redeem. The attacker is repaid the donation and keeps the 100 as profit. A larger donation raises the minimum deposit that still mints one share, so later users either mint 0 and lose everything, or lose the rounding remainder.

Sources#

AuditVault finding: https://github.com/Auditware/AuditVault/blob/main/findings/57883-c-01-first-depositor-can-inflate-share-price-to-steal-funds.md
Report: https://github.com/shieldify-security/audits-portfolio-md/blob/main/HarmonixFinance-Hyperliquid-Security-Review.md
Reviewed tree: https://github.com/harmonixfi/core-contracts/tree/f02157aba919dcdd4a1133669361224108c5caef (contracts/vaults/hyperliquid/fundContract.sol, _updateNav)

Sources & further analysis#

Reproductions & code

Standalone PoC + full trace: 57883-c-01-first-depositor-can-inflate-share-price-to-steal-funds_exp (evm-hack-registry mirror).
AuditVault finding: 57883-c-01-first-depositor-can-inflate-share-price-to-steal-funds.

Alerts & third-party analyses

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