6.1 Lack of Slippage Protection can lead to Unfavorable Exchange Rates
The MultiATM contract facilitates token swaps using functions like swapExactInput(...) and swapExactOutput(...). These functions determine the final exchanged amount by first calling a view function (e.g., previewExactInput(...)), which internally consults the on-chain Oracle to get the current price.
The contract does not include any mechanism, such as a user-specified minimum output amount or maximum input amount, to protect the user from price fluctuations (slippage) between when the transaction is signed and when it is executed and mined on the blockchain.
The flow for a swap, such as swapExactInputSingle(...), is as follows:
- The user calls
swapExactInputSingle(input, output, inputAmount, recipient). - The contract calls
previewExactInputSingle(...) which uses the oracle price at that moment to calculate outputAmount. - The contract then calls
_swapExact(...) using this calculated outputAmount.
If the oracle price changes (naturally, due to new data published on the Chainlink feed) between the calculation and the execution of the transaction, the user's effective exchange rate will differ from the rate they initially calculated and expected. Since the contract executes the swap with the calculated amount, the user is forced to accept a potentially much worse rate.
For example, in swapExactInputSingle(...):
function swapExactInputSingle(IERC20 input, IERC20 output, uint256 inputAmount, address recipient)
public
virtual
restricted
returns (
uint256 /*outputAmount*/
)
{
uint256 outputAmount = previewExactInputSingle(input, output, inputAmount);
// @audit-issue outputAmount is calculated and executed without a user-defined slippage limit.
_swapExact(input, output, inputAmount, outputAmount, _msgSender(), recipient);
return outputAmount;
}
If the price of output token drops (meaning the oracle rate decreases) between the two steps, the user will receive a lower amount of output token than expected, leading to an unfavorable exchange.
Recommendation
Consider introducing a slippage tolerance parameter to all swap functions. This is a standard security practice in DeFi protocols to protect users from unexpected price changes.
- For exact input swaps (
swapExactInput(...) and swapExactInputSingle(...)): Add a minOutputAmount parameter. The function should revert if the final received amount is less than this user-defined minimum. - For exact output swaps (
swapExactOutput(...) and swapExactOutputSingle(...)): Add a maxInputAmount parameter. The function should revert if the final required input amount exceeds this user-defined maximum.
Resolution
Fixed 0231aee978de
6.2 The contract defaults to 18 decimals if the token does not implement the decimals(...) function.
The tryFetchDecimals(...) function defaults to 18 decimals if the token contract does not implement the decimal(...) function as seen below:
function tryFetchDecimals(IERC20 token) view returns (uint8) {
try IERC20Metadata(address(token)).decimals() returns (uint8 result) {
return result;
} catch {
return 18;
}
}
This function is used when setting token pairs via the setPair (...) function, which uses the returned token decimals to set the numerator and denominator variables, which are used in pricing of tokens during swaps.
As a result, if the default 18 decimals are not accurate as related to the token, this can lead to mispricing of token pairs.
Recommendation
Consider reverting if the token does not implement the decimals (...) function.
Resolution
Fixed 0231aee978de
