Submitted by cmichel
BondVault deposits match any deposited token amount with the BASE amount to provide liquidity, see Docs and DAO.handleTransferIn.
The matched BASE amount is the swap amount of the token trade in the pool.
An attacker can manipulate the pool and have the DAO commit BASE at bad prices which they then later buys back to receive a profit on BASE. This is essentially a sandwich attack abusing the fact that one can trigger the DAO to provide BASE liquidity at bad prices:
The DAOs Bond allocation can be stolen.
The cost of the attack is the trade fees in 1. + 3. as well as the tokens used in 2. to match the BASE, but the profit is a share on the BASE supplied to the pool by the DAO in 2.
Track a TWAP spot price of the TOKEN <> BASE pair and check if the BASE incentive is within a range of the TWAP. This circumvents that the DAO commits BASE at bad prices.
verifyfirst (Spartan) acknowledged and disagreed with severity:
ghoul-sol (judge) commented:
