How Was Level Finance Exploited?

TL;DR#

On May 1, 2023, Level Finance was exploited due to a smart contract vulnerability, resulting in a loss of approximately $1.1 million.

Introduction to Level Finance#

Level Finance is a decentralized and non-custodial perpetual market on the BNB Chain with custom risk management and innovative LP solutions.

Vulnerability Assessment#

The root cause of the vulnerability is a bug that allows multiple referral claims from the same epoch.

Steps#

Step 1:

We attempted to analyze the attack transaction executed by the exploiter.

Step 2:

The contract has incorrectly set the way in which rewards are calculated using the `claimMultiple` function. Instead of performing a `+=` operation, it just sets the value with an `=` operation, so the same value gets used for deduction over and over again.

function claimMultiple(uint256[] calldata _epoches, address _to) external {
  uint256 totalReward;
  for (uint256 i = 0; i < _epoches.length; ++i) {
    uint256 epoch = _epoches[i];
    if (epoch < currentEpoch) {
      uint256 reward = claimable(epoch, msg.sender);
      if (reward > 0) {
        users[epoch][msg.sender].claimed = reward;
        totalReward += reward;
        emit Claimed(epoch, _to, reward);
      }
    }
  }

  LVL.safeTransfer(_to, totalReward);
}

Step 3:

Due to this error, it allowed for repeated referral claims from the same epoch.

Step 4:

The exploiter drained approximately 214k LVL tokens and swapped them into 3,345 BNB, worth approximately $1.1 million. All of the stolen assets are held at this address.

Aftermath#

Following the attack, the team acknowledged the occurrence of the incident. The specifics mention the details of the stolen LVL tokens and that the attacker has swapped them for BNB tokens. The exploit was isolated from other contracts, and a fix for the issue will be deployed shortly. They further mentioned that the liquidity pools and DAO Treasury remained unaffected.

Solution#