Submitted by Bobface
https://github.com/with-backed/papr/blob/9528f2711ff0c1522076b9f93fba13f88d5bd5e6/src/PaprController.sol#L208
https://github.com/with-backed/papr/blob/9528f2711ff0c1522076b9f93fba13f88d5bd5e6/src/PaprController.sol#L182
The PaprController contract does not allow users to submit a deadline for their actions which execute swaps on Uniswap V3. This missing feature enables pending transactions to be maliciously executed at a later point.
AMMs provide their users with an option to limit the execution of their pending actions, such as swaps or adding and removing liquidity. The most common solution is to include a deadline timestamp as a parameter (for example see Uniswap V2 and Uniswap V3). If such an option is not present, users can unknowingly perform bad trades:
An even worse way this issue can be maliciously exploited is through MEV:
Since Papr directly builds on Uniswap V3, such deadline parameters should also be offered to the Papr users when transactions involve performing swaps. However, there is no deadline parameter available. Some functions, such as _increaseDebtAndSell, are to some degree protected due to the oracle signatures becoming outdated after 20 minutes, though even that could be too long for certain trades. Other functions, such as buyAndReduceDebt, are entirely unprotected.
Introduce a deadline parameter to all functions which potentially perform a swap on the users behalf.
Categorizing this issue into Medium versus High was not immediately obvious. I came to the conclusion that this is a high-severity issue for the following reason:
I run an arbitrage MEV bot myself, which also tracks pending transactions in the mempool, though for another reason than the one mentioned in this report. There is a significant amount of pending and even dropped transactions: over 200,000 transactions that are older than one month. These transactions do all kinds of things, from withdrawing from staking contracts to sending funds to CEXs and also performing swaps on DEXs like Uniswap. This goes to show that this issue will in fact be very real, there will be very old pending transactions wanting to perform trades without a doubt. And with the prevalence of advanced MEV bots, these transactions will be exploited as described in the second example above, leading to losses for Paprs users.
Omitted in this case, since the exploit is solely based on the fact that there is no limit on how long a transaction including a swap is allowed to be pending, which can be clearly seen when looking at the mentioned functions.
Jeiwan (warden) commented:
wilsoncusack (Backed) disagreed with severity and commented:
trust1995 (judge) decreased severity to Medium and commented:
