Full Report
In November of 2022, BlockSec sounded the alarms: funds had been successfully drained from SushiSwap. They contacted the Sushi security team to try to remediate the situation. There are functional bugs within smart contracts, like reentrancy and integer overflows. A large amount of the vulnerabilities are accounting bugs that come from messing up the math. The borrow() function has the modifier solvent to check to see if it's above water. If it's not, then the transaction will revert. This is compared against the exchangeRate. Of particular importance is that this variable is mistakenly NOT upgraded in this function call. In liquidate, the updating for the exchangeRate is done in the beginning of the function. If two prices are different between withdrawal and deposit, this can be a major case for exploitation. The exploit steps are pretty straight forward for this. The attacker used a flash loan to amplify the calculation difference. In particular, the exchange rate in the borrow function was 250 * 10^27. On the liquidate function the exchange rate was 328 * 10^27. By borrowing at one rate then liquidating at another, they were able to make a huge profit off of this. I'm guessing that the hacker was sitting on a large price difference for a while in order to exploit this bug. Overall, an interesting yet simple bug. Gotta do better than this!
Analysis Summary