Lines of code

Vulnerability details

Impact

ClearingHouses are deployed for each new loan and settle payments between Seaport auctions and Astaria Vaults if a liquidation occurs.

However, due to the lack of proper data validation in the current implementation, anyone can fake a token and transfer it to the ClearingHouse to settle the auction, which would undermine the clearing process and harm the entire system.

#Proof of Concept

function safeTransferFrom(
    address from, // the from is the offerer
    address to,
    uint256 identifier,
    uint256 amount,
    bytes calldata data //empty from seaport
  ) public {
    //data is empty and useless
    _execute(from, to, identifier, amount);
  }

<https://github.com/code-423n4/2023-01-astaria/blob/1bfc58b42109b839528ab1c21dc9803d663df898/src/ClearingHouse.sol#L114-L167&gt;

function _execute(
    address tokenContract, // collateral token sending the fake nft
    address to, // buyer
    uint256 encodedMetaData, //retrieve token address from the encoded data
    uint256 // space to encode whatever is needed,
  ) internal {
    IAstariaRouter ASTARIA_ROUTER = IAstariaRouter(_getArgAddress(0)); // get the router from the immutable arg

    ClearingHouseStorage storage s = _getStorage();
    address paymentToken = bytes32(encodedMetaData).fromLast20Bytes();

    uint256 currentOfferPrice = _locateCurrentAmount({
      startAmount: s.auctionStack.startAmount,
      endAmount: s.auctionStack.endAmount,
      startTime: s.auctionStack.startTime,
      endTime: s.auctionStack.endTime,
      roundUp: true //we are a consideration we round up
    });
    uint256 payment = ERC20(paymentToken).balanceOf(address(this));

    require(payment >= currentOfferPrice, "not enough funds received");

    uint256 collateralId = _getArgUint256(21);
    // pay liquidator fees here

    ILienToken.AuctionStack[] storage stack = s.auctionStack.stack;

    uint256 liquidatorPayment = ASTARIA_ROUTER.getLiquidatorFee(payment);

    ERC20(paymentToken).safeTransfer(
      s.auctionStack.liquidator,
      liquidatorPayment
    );

    ERC20(paymentToken).safeApprove(
      address(ASTARIA_ROUTER.TRANSFER_PROXY()),
      payment - liquidatorPayment
    );

    ASTARIA_ROUTER.LIEN_TOKEN().payDebtViaClearingHouse(
      paymentToken,
      collateralId,
      payment - liquidatorPayment,
      s.auctionStack.stack
    );

    if (ERC20(paymentToken).balanceOf(address(this)) > 0) {
      ERC20(paymentToken).safeTransfer(
        ASTARIA_ROUTER.COLLATERAL_TOKEN().ownerOf(collateralId),
        ERC20(paymentToken).balanceOf(address(this))
      );
    }
    ASTARIA_ROUTER.COLLATERAL_TOKEN().settleAuction(collateralId);
  }

safeTransferFrom() is a public function without msg.sender access check, encodedMetaData is user data, there no check make sure address paymentToken = bytes32(encodedMetaData).fromLast20Bytes() is the settlementToken.

so the paymentToken can be a fake token worth nothing.

when an attacker call safeTransferFrom before the real auction got settled, the real auction can not settle.

Recommended Mitigation Steps

add check make sure paymentToken = settlementToken

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