When calling the following TimeswapV2Option.mint function, msg.sender uses the ITimeswapV2OptionMintCallback.timeswapV2OptionMintCallback function to transfer the relevant token0 and/or token1 to the TimeswapV2Option contract. Similarly, when calling the TimeswapV2Option.swap function below, msg.sender uses the ITimeswapV2OptionSwapCallback.timeswapV2OptionSwapCallback function to transfer the relevant token0 or token1 to the TimeswapV2Option contract. When token0 or token1 is a rebasing token, it is possible that the user uses these callback functions to trigger such tokens rebasing event that increases its balance owned by the TimeswapV2Option contract.
Then, when the TimeswapV2Option.mint and TimeswapV2Option.swap functions call Error.checkEnough, the rebasing tokens balance owned by the TimeswapV2Option contract can possibly exceed the corresponding balance target. As a result, the user is able to mint or swap option positions without sending any of such rebasing token to the TimeswapV2Option contract.
As a mitigation, this protocol can behave like other protocols that do not support rebasing tokens and use a blocklist to block such tokens from being used as token0 or token1 for any options.
https://github.com/code-423n4/2023-01-timeswap/blob/main/packages/v2-option/src/TimeswapV2Option.sol#L109-L154
https://github.com/code-423n4/2023-01-timeswap/blob/main/packages/v2-option/src/TimeswapV2Option.sol#L198-L244
