Submitted by klau5, also found by gjaldon and 0x007
https://github.com/code-423n4/2024-08-axelar-network/blob/4572617124bed39add9025317d2c326acfef29f1/axelar-amplifier/interchain-token-service/src/contract/execute.rs#L112-L135
https://github.com/code-423n4/2024-08-axelar-network/blob/4572617124bed39add9025317d2c326acfef29f1/axelar-amplifier/interchain-token-service/src/state.rs#L192
Insufficient balance in the ITSHub prevents bridging, leading to a DoS attack on the bridge.
ITSHub tracks token balances per chain when moving tokens. If the interchain token is not deployed on the destination chain, the balance is uninitialized, and this transaction is not reverted but passed. In other words, token transfer requests are processed normally even if the interchain token is not deployed on the destination chain.
If the interchain token is not deployed on the destination chain, even if the message is approved, tokens cannot be bridged because the token is not deployed. However, we can consider scenarios where the remote interchain token deployment request is frontrunned. For canonical tokens, anyone can deploy remote interchain tokens, so its easy to create a scenario where token transfer is requested first, followed by a request to deploy the remote interchain token.
Consider the following example:
The balance in ITSHub is 0, but there are 100 ether of bridged tokens on chain B. This balance mismatch can cause problems such as DoS. For example, if another user bridges tokens from chain A to B, increasing the ITSHub balance, the attacker can bridge back from B to A, reducing the ITSHub balance. If a user then tries to bridge from B to A again, they wont be able to due to insufficient balance in ITSHub.
The problem is allowing bridging to chains where the remote interchain token is not deployed. The implementation of update_token_balance should be changed to allow bridging only to chains where the balance has been initialized.
If you dont want to track the balance of the source chain, instead of judging by balance initialization, you should accurately identify the source chain and handle it.
DoS
milapsheth (Axelar) confirmed and commented:
0xsomeone (judge) increased severity to High and commented:
