Griefing attack in Lyra V2

[gandu0]

Bug Description

Where
permitAndSubmitTransfer and permitAndSubmitTransfers

Expected behavior:

• The permitAndSubmitTransfers function utilizes the lyra’s permit function so that approve and pull operations can happen in a single transaction instead of two consecutive transactions.

Attack:

• _Permit () functionality uses the nonces mapping for replay protection. Once a signature is verified and approved, the nonce increases, invalidating the same signature being replayed.
• permitAndSubmitTransfers expects the holder to sign their tokens and provide the signature to contract as part of permitData
  When a permitAndSubmitTransfers transaction is in the mempool, an attacker can take this signature, call the external permit() function on the token themselves.
• Since this is a valid signature, the token accepts it and increases the nonce.
• This makes the spender's transaction fail whenever it gets mined.

Impact

• Attacker can make sure all calls to permitAndSubmitTransfers fail for the first time.
• Approve and pull operations can not happen in a single transaction.

Risk Breakdown

• Difficulty to Exploit: Easy
• Severity: Medium

Recommendation

• In permitAndSubmitTransfers fuction, check if it has the approval it needs. If not, then only submit the permit signature.

Reference

• 1Inch:
  https://github.com/1inch/solidity-utils/blob/master/contracts/libraries/SafeERC20.sol#L299
• Gearbox:
  https://github.com/Gearbox-protocol/core-v3/blob/main/contracts/credit/CreditFacadeV3.sol#L775

[0xdomrom]

Acknowledged, thank you for the report. Will DM about potential rewards