🖼️Vulnerability: Missing fromToken != toToken Check

Introduction

In token swap protocols, especially those handling complex operations like cross-chain swaps or margin trading, ensuring proper validation of input parameters is critical to maintaining the integrity and security of the system. One of the key checks often overlooked is confirming that the input token (fromToken) and output token (toToken) are different.

Without this validation, attackers can manipulate the swap process by specifying the same token for both fromToken and toToken, leading to potential exploits where they withdraw funds or circumvent important security mechanisms such as time-locks or cooling periods. This type of vulnerability is particularly dangerous because it can drain liquidity or enable an attacker to withdraw funds they should not have access to, ultimately compromising the financial security of the protocol.

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Vulnerability: Missing fromToken != toToken Check

How the Exploit Works

When the contract responsible for token swapping (or any similar operation) does not check whether the input token and output token are the same, it allows attackers to manipulate the process. Typically, during a swap, the fromToken should be exchanged for a different toToken. If this check is missing, however, the attacker can specify the same token for both, causing the swap logic to misbehave and enabling them to withdraw funds without undergoing the proper swap process.

Attack Flow

1. No Input Validation: The swap function does not verify that fromToken and toToken are different.

2. Fake Pair Setup: The attacker calls the function with a crafted pair, where the same token is used for both input and output.

3. Fake Swap Process: The swap proceeds with fake reserves, allowing the attacker to bypass proper fund transfers or security checks, such as time-locks.

4. Circumventing Security Mechanisms: The attacker can bypass conditions like cooling-off periods or other time-based restrictions on withdrawals by exploiting the faulty logic.

5. Fund Withdrawal: The attacker eventually ends up withdrawing the funds or circumventing security restrictions, leaving the system vulnerable.

Tutorial: Vulnerability Arising from Missing fromToken != toToken Check

Introduction

In token swap protocols, especially those handling complex operations like cross-chain swaps or margin trading, ensuring proper validation of input parameters is critical to maintaining the integrity and security of the system. One of the key checks often overlooked is confirming that the input token (fromToken) and output token (toToken) are different.

Without this validation, attackers can manipulate the swap process by specifying the same token for both fromToken and toToken, leading to potential exploits where they withdraw funds or circumvent important security mechanisms such as time-locks or cooling periods. This type of vulnerability is particularly dangerous because it can drain liquidity or enable an attacker to withdraw funds they should not have access to, ultimately compromising the financial security of the protocol.

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Vulnerability: Missing fromToken != toToken Check

How the Exploit Works

When the contract responsible for token swapping (or any similar operation) does not check whether the input token and output token are the same, it allows attackers to manipulate the process. Typically, during a swap, the fromToken should be exchanged for a different toToken. If this check is missing, however, the attacker can specify the same token for both, causing the swap logic to misbehave and enabling them to withdraw funds without undergoing the proper swap process.

Attack Flow

1. No Input Validation: The swap function does not verify that fromToken and toToken are different.

2. Fake Pair Setup: The attacker calls the function with a crafted pair, where the same token is used for both input and output.

3. Fake Swap Process: The swap proceeds with fake reserves, allowing the attacker to bypass proper fund transfers or security checks, such as time-locks.

4. Circumventing Security Mechanisms: The attacker can bypass conditions like cooling-off periods or other time-based restrictions on withdrawals by exploiting the faulty logic.

5. Fund Withdrawal: The attacker eventually ends up withdrawing the funds or circumventing security restrictions, leaving the system vulnerable.

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Example: Faulty Swap Logic

Let’s consider a simplified version of the vulnerable swap logic. Below, the swapTokens function does not check whether fromToken is the same as toToken:

function swapTokens(
    address fromToken, 
    address toToken, 
    uint256 amountIn, 
    address recipient
) external {
    // Vulnerability: No check to ensure fromToken != toToken
    uint256 amountOut = calculateAmountOut(fromToken, toToken, amountIn);

    // Transfer the input tokens from the user to the contract
    IERC20(fromToken).transferFrom(msg.sender, address(this), amountIn);

    // Transfer the output tokens from the contract to the user
    IERC20(toToken).transfer(recipient, amountOut);
}

function calculateAmountOut(
    address fromToken, 
    address toToken, 
    uint256 amountIn
) internal view returns (uint256) {
    // Calculation logic (vulnerable when fromToken == toToken)
    return amountIn * getExchangeRate(fromToken, toToken);
}

In this case:

• The contract fails to check whether the fromToken and toToken are the same.

• An attacker could call this function with the same token for both fromToken and toToken.

• If the swap logic allows, the attacker can manipulate the reserves, making it appear as if a valid trade occurred, when in reality, no actual token exchange took place.

This allows the attacker to bypass the intended security mechanisms, such as cooling-off periods for withdrawals, or to trick the contract into performing fake swaps.

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Potential Impact

Failing to validate that the fromToken and toToken are different can have severe consequences, including:

1. Liquidity Drain: The attacker could repeatedly use this technique to drain liquidity from the pools, causing significant financial loss for liquidity providers and the protocol.

2. Bypassing Security Mechanisms: This exploit can be used to bypass important security features, such as time-locks or cooldown periods that are meant to protect user funds and the protocol’s stability.

3. Economic Loss: Even if liquidity is not fully drained, this exploit can disrupt the economic balance of the protocol, leading to price slippage or other market manipulation strategies that could harm regular users.

Mitigation Strategies

To prevent this type of vulnerability, it is essential to include a check that ensures the fromToken and toToken are not the same

Conclusion

The absence of a fromToken != toToken check introduces a critical vulnerability in swap-based protocols. Attackers can use this oversight to drain liquidity, bypass security measures, or manipulate the economic functions of the protocol. Developers and auditors must always include proper input validation to ensure that protocols function as intended, safeguarding against exploits and preserving user trust.

By implementing straightforward checks, like ensuring the fromToken and toToken are different, DeFi protocols can protect themselves from these types of exploits and prevent significant financial loss.