Panoptic — cross-contract reentrancy converts phantom shares to real shares

Source & credit. Reproduction of a public audit finding curated by AuditVault — the original finding: 65026-h-02-cross-contract-reentrancy-in-liquidation-enables-conver. Standalone Foundry PoC and full write-up: 65026-h-02-cross-contract-reentrancy-in-liquidation-enables-conver_exp in the evm-hack-registry mirror.

Vulnerability classes: cross-contract · single-function · direct-drain · reentrancy-guard

Reproduction: a self-contained Foundry PoC that compiles & runs in an isolated project with only forge-std — no fork, no RPC, no anvil_state. Full trace: output.txt. PoC: test/65026-h-02-cross-contract-reentrancy-in-liquidation-enables-conver_exp.sol.

Key info#


Impact	HIGH — reentrant transfer of phantom shares during liquidation drains CollateralTracker
Protocol	Panoptic
Vulnerable code	`CollateralTracker`
Bug class	cross-contract
Finding	Code4rena — Panoptic, 2025-12 · #65026 · reporter qed
Report	code4rena.com/reports/2025-12-panoptic-next-core
Source	AuditVault
Status	Audit finding — caught in review, not exploited on-chain. Reproduced as a standalone local PoC.
Compiler	`^0.8.24` (PoC)

This is an audit finding, not a historical on-chain incident. The PoC keeps the vulnerable logic verbatim (marked @> VULN) and reduces dependencies to the minimum needed to show the claimed harm.

TL;DR#

Liquidation delegates type(uint248).max phantom shares on ct0 and ct1.
ct0.settleLiquidation refunds ETH to liquidator before ct1 is revoked.
Reentrant transferFrom moves ct1 phantom shares to the attacker.
revoke mints missing phantom into _internalSupply; attacker redeems real assets.

The vulnerable code#

See test/65026-h-02-cross-contract-reentrancy-in-liquidation-enables-conver.sol — the @> VULN marker is on the blamed line (line 152 in the synthetic).

Root cause#

ETH refund reentrancy window + revoke treating transferred phantom as consumed.

Preconditions#

Protocol operating conditions that make the path reachable (see finding report). No exotic privileges beyond those the real call path requires.

Attack walkthrough#

From output.txt: the Exploit.run() path executes the attack end-to-end and requires the harm.

Diagrams#

flowchart TD A[Setup reduced protocol state] --> B[Trigger vulnerable path] B --> C[VULN line executes] C --> D[Harm asserted]

Impact#

Complete drainage of CollateralTracker assets from LPs.

Sources#

AuditVault finding
Code4rena report
Protocol source: https://github.com/code-423n4/2025-12-panoptic

Sources & further analysis#

Reproductions & code

Standalone PoC + full trace: 65026-h-02-cross-contract-reentrancy-in-liquidation-enables-conver_exp (evm-hack-registry mirror).
AuditVault finding: 65026-h-02-cross-contract-reentrancy-in-liquidation-enables-conver.

Alerts & third-party analyses

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

These dashboards index community alerts tweets, post-mortems, and independent write-ups. Reach them through the protocol name above to cross-check this reproduction against other analyses.

Source-level debugger — step opcodes and Solidity in sync