Submitted by carrotsmuggler, also found by xuwinnie
https://github.com/Tapioca-DAO/tapiocaz-audit/blob/bcf61f79464cfdc0484aa272f9f6e28d5de36a8f/contracts/tOFT/modules/BaseTOFTLeverageModule.sol#L212 
https://github.com/Tapioca-DAO/tapiocaz-audit/blob/bcf61f79464cfdc0484aa272f9f6e28d5de36a8f/contracts/tOFT/modules/BaseTOFTLeverageModule.sol#L269-L277
The function sendForLeverage is used to interact with the USDO token on a different chain. Lets assume the origin of the tx is chain A, and the destination is chain B. The BaseTOFT contract sends a message through the lz endpoints to make a call in the destination chain.
The flow of control is as follows:
Chain A : user -call-> BaseTOFT.sol:sendForLeverage -delegateCall-> BaseTOFTLeverageModule.sol:sendForLeverage -call-> lzEndpointA
Chain B : lzEndpointB -call-> BaseTOFT.sol:_nonblockingLzReceive -delegateCall-> BaseTOFTLeverageModule.sol:leverageDown -delegateCall-> leverageDownInternal
For the last call to leverageDownInternal, the msg.sender is the lzEndpointB. This is because all the calls since then have been delegate calls, and thus msg.sender has not been able to change. We analyze the leverageDownInternal function in this context.
The very first operation is to do an unwrap of the mTapiocaOFT token. This is done by calling _unwrap defined in the same contract as shown.
Here we see the contract is trying to burn tokens from the msg.sender address. But the issue is in this context, the msg.sender is the lzEndpoint on chain B who is doing the call, and they dont have any TOFT tokens there. Thus this call will revert.
The TOFT tokens are actually held within the same contract where the execution is happening. This is because in the leverageDown function, we see the contract credit itself with TOFT tokens.
Thus the tokens are actually present in address(this) and not in msg.sender. Thus the burn should be done from address(this) and not msg.sender. Thus all cross chain calls for this function will fail and revert.
Since this leads to broken functionality, this is considered a high severity issue.
Since no test exists for the sendForLeverage function, no POC is provided. However the flow of control and detailed explanation is provided above.
Run _burn(address(this),amount) to burn the tokens instead of unwrapping. Then do the eth/erc20 transfer from the contract.
0xRektora (Tapioca) confirmed via duplicate issue 725
