How A Whitehat Hacker Saved 109K ETH On SushiSwap-Based Contract

White hat hacker Samczsun from investment firm Paradigm reported what could be one of the biggest rescues ever on the SushiSwap protocol, the Ethereum ecosystem, and maybe the entire internet.

Just pulled off maybe the biggest whitehat rescue ever. Story time soon 🔥

— samczsun (@samczsun) August 17, 2021

Samczun claimed in a post that he found and help patch a vulnerability that was threatening over $350 million or 109,000 ETH from a Sushiswap based contract from its MISO platform. The white hacker reviewed the contract after he found there was a new auction taking place on the platform.

MISO uses two types of auctions Duct and batch. While Samczun was reviewing the DutchAuction contract, the white hacker found that functions InitMarket and InitAuction lacked access controls. This was “extremely concerning”.

I didn’t really expect this to be a vulnerability though, since I didn’t expect the Sushi team to make such an obvious misstep. Sure enough, the initAccessControls function validated that the contract had not already been initialized.

Samczun said that the above combined with the use of a mixin library called BoringBatchable by the contract made it more suspicious. The hacker recognized the ingredients that led to an attack on another platform during 2020.

Thus, Samczun was able to identify that SushiSwap was in danger. If exploited, the vulnerability would allow a bad actor to reuse a fixed amount of ETH to batch multiple calls to the contract. This would effectively allow the attacker to “bid in the auction for free”.

While processing token payments involved a separate transferFrom call for each loop iteration, processing ETH payments simply checked whether msg.value was sufficient. This allowed the attacker to reuse the same ETH multiple times.

Fixing A Multi-Million Dollar Bug On SushiSwap

In addition to free bids, a bad actor could steal the funds on the SushiSwap contract by triggering a refund. The attacker would have had only to send a higher amount of ETH than the auction hard cap. Samczun said:

This applied even once the hard cap was hit, meaning that instead of rejecting the transaction altogether, the contract would simply refund all of your ETH instead.

Just minutes after the white hacker discovered the vulnerability, he put set up a “poor man’s mainnet fork on the command line”. Thus, Samczun was able to verify if the contract would allow for the above describe attack.

Once the thesis was verified, the white hacker reported the bug to SushiSwap’s CTO Joseph Delong. He and other members of the protocol’s team coordinated a response to remove the bug. The team and Samczun “rescued” the funds by buying the remaining items. Thus, the auction was finalized.

As pseudonym community member DC Investor said, the fact that the vulnerability was discovered by a white-hat hacker from an investment firm with a high stake on Uniswap, the decentralized exchange competing with SushiSwap, says a lot about the “ethos” of the Ethereum ecosystem. DC said:

Found and helped patch a vulnerability that put over 109k ETH at risk everyone knows Paradigm has big UNI / Uniswap bags, but Sam from their team just helped save SushiSwap (an ostensible competitor) from a critical bug this is the ethos of the space among the best actors.

At the time of writing, SUSHI trades at $12,50 with a 2.4% loss in the daily chart.

SUSHI moving sideways after bug report was published on the daily chart. Source: SUSHIUSDT Tradingview