Submitted by 0xloscar01, also found by Breeje, Limbooo, rouhsamad, n0kto, 0xAadi, jesjupyter (1, 2), 0xpiken, peanuts, thank_you, zhaojohnson, pkqs90, Tendency, max10afternoon, matejdb, BowTiedOriole, Fassi_Security, aslanbek, SpicyMeatball, ZanyBonzy, JohnSmith, Topmark, and atoko
https://github.com/code-423n4/2024-02-althea-liquid-infrastructure/blob/main/liquid-infrastructure/contracts/LiquidInfrastructureERC20.sol#L222
When LiquidInfrastructureERC20 owner disapproves a holder, it prevents the holder from receiving any revenue from the contract. However, the disapproved holder will still keep part of the supply, diluting the revenue of the approved holders.
The dilution is a result of the calculation of the entitlements per token held, which is based on the division of the ERC20 balances held by the LiquidInfrastructureERC20 contract and the total supply of the LiquidInfrastructureERC20 token.
https://github.com/code-423n4/2024-02-althea-liquid-infrastructure/blob/main/liquid-infrastructure/contracts/LiquidInfrastructureERC20.sol#L257-L281
Test Case:
Logs:
Steps to reproduce the test:
Inside the 2024-02-althea-liquid-infrastructure/liquid-infrastructure folder:
Full Test Suite:
To prevent dilution of revenue for approved holders, consider implementing a mechanism to burn the tokens of disapproved holders upon disapproval.
In the event that disapproved holders are intended to retain their tokens for potential reapproval in the future, track the balance of the LiquidInfrastructureERC20 tokens held by the holder at the time of their disapproval. Subsequently, burn the tokens. Upon reapproval, mint the same amount of tokens to the holder, ensuring they regain their previous token balance.
ChristianBorst (Althea) confirmed and commented:
0xA5DF (judge) commented:
SovaSlava (warden) commented:
sl1 (warden) commented:
0xA5DF (judge) commented:
