--- ### Lack of Slippage Protection - Write-up The very next vulnerability we're going to write up is found within `swapExactOutput` and is classified as a `lack of slippage protection`. ```js // @Audit-High - Needs slippage protection - maxInputAmount function swapExactOutput( IERC20 inputToken, IERC20 outputToken, uint256 outputAmount, uint64 deadline ) public revertIfZero(outputAmount) revertIfDeadlinePassed(deadline) returns (uint256 inputAmount) { uint256 inputReserves = inputToken.balanceOf(address(this)); uint256 outputReserves = outputToken.balanceOf(address(this)); inputAmount = getInputAmountBasedOnOutput(outputAmount, inputReserves, outputReserves); _swap(inputToken, inputAmount, outputToken, outputAmount); } ``` I suspect this is going to be a `high severity` bug, but let's assess `impact` and `likelihood` once more. - **Impact:** High -> a swap may be significant worse for a user than expected - **Likelihood:** -> Medium/High -> MEV (learn later), market conditions change all the time Slippage protection is a necessary consideration in nearly all token swaps. I want you to take a moment to pause the read into some of the real-world examples identified in audits on [**Solodit**](https://solodit.xyz/). Let's write up our second `high severity` finding! Compare your write up to mine below - challenge yourself not to peek! <details> <summary>[H-2] Lack of slippage protection in TSwapPool::swapExactOutput causes users to potentially receive way fewer tokens</summary> ### [H-2] Lack of slippage protection in TSwapPool::swapExactOutput causes users to potentially receive way fewer tokens **Description:** The `swapExactOutput` function does not include any sort of slippage protection. This function is similar to what is done in `TSwapPool::swapExactInput`, where the function specifies a `minOutputAmount`, the `swapExactOutput` function should specify a `maxInputAmount`. **Impact:** If market conditions change before the transaction processes, the user could get a much worse swap. **Proof of Concept:** 1. The price of 1 WETH right now is 1,000 USDC 2. User inputs a `swapExactOutput` looking for 1 WETH 1. inputToken = USDC 2. outputToken = WETH 3. outputAmount = 1 4. deadline = whatever 3. The function does not offer a maxInput amount 4. As the transaction is pending in the mempool, the market changes! And the price moves HUGE -> 1 WETH is now 10,000 USDC. 10x more than the user expected 5. The transaction completes, but the user sent the protocol 10,000 USDC instead of the expected 1,000 USDC **Recommended Mitigation:** We should include a `maxInputAmount` so the user only has to spend up to a specific amount, and can predict how much they will spend on the protocol. ```diff function swapExactOutput( IERC20 inputToken, + uint256 maxInputAmount, . . . inputAmount = getInputAmountBasedOnOutput(outputAmount, inputReserves, outputReserves); + if(inputAmount > maxInputAmount){ + revert(); + } _swap(inputToken, inputAmount, outputToken, outputAmount); ``` </details> ### Wrap Up I'll mention as an aside that there's _some_ argument for the above to be considered a `medium severity` vulnerability, this pertains to user approvals and things of an accountability nature, but for this we'll leave it as a `high`. Let's tackle the next finding, in the next lesson!