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Ethereum Reentrancy exploit to steal 80M USD

This is a PoC recreation of the exploit against RariCapital which stole 80M USD from their lending pool by exploiting a Reentrancy and Flash Loan vulnerability. The attack was carried out in this transaction: https://versatile.blocksecteam.com/tx/eth/0xab486012f21be741c9e674ffda227e30518e8a1e37a5f1d58d0b0d41f6e76530; and the tweet by BlockSecTeam is here: https://twitter.com/BlockSecTeam/status/1520350965274386433

Background

Flash Loans

Flash loans are transactions that we can do on a Vault (Balancer Vault) to get an amount of money from the vault. We can then use this money to perform any actions that we want within the same transaction. The requirement is that the money must be returned back to the Vault. Ref: https://docs.balancer.fi/concepts/features/flash-loans

Reentrancy

Reentrancy is a kind of vulnerability which allows us to reenter into a contract's functions before the state changes are made which prevent reexecution of the same logic. This can allow an attacker to perform some action which is beneficial to them repeatedly before the contract updates the relevant state which prevents it.

Effects of this exploit

(Remove) Coins affected

The attacker stole money in the form of USDC and WETH. USDC is pegged to the actual value of USD; WETH is a wrapped version of ETH so that it can be used as a token.

Structure of exploit

The exploit makes use of a malicious contract which is created by the attacker. This contract then calls the flashLoan function on the BalancerVault contract. The tokens that it requests are: [USDC, WETH]; and the amounts are: [150000000000000, 50000000000000000000000] respectively.

Once it has the amounts received, the function receiveFlashLoan is called by BalancerVault. This will then spawn another contract which uses these funds to enter into markets, accrue interest, borrow and then redeem the profits. When it does the borrow function on the tokens, the fallback function will be triggered along with the borrowed amount. This is used to then call exitMarket, which means that the market is exited without repaying the borrowed amount. So, the funds are now stolen. It does this twice.

Addresses:

  • The malicious user account: 0x6162759eDAd730152F0dF8115c698a42E666157F
  • The inital malicious contract: 0x32075bAd9050d4767018084F0Cb87b3182D36C45
  • The first spawned contract: 0x03296D34FD6B3619a75860f44a0D2C68336708e7
  • The second spawned conract: 0x4Ec88aa13b789fA31e939124a3384DcE9d8030e8

Ethereum Reentrancy exploit to steal 80M USD

This is a PoC recreation of the exploit against RariCapital which stole 80M USD from their lending pool by exploiting a Reentrancy and Flash Loan vulnerability. The attack was carried out in this transaction: https://versatile.blocksecteam.com/tx/eth/0xab486012f21be741c9e674ffda227e30518e8a1e37a5f1d58d0b0d41f6e76530; and the tweet by BlockSecTeam is here: https://twitter.com/BlockSecTeam/status/1520350965274386433

Core ideas for the exploit:

Basics/background

What is flash loan What is the reentrancy

effects of exploit

Which coins were affected How much of each coin stolen

structure of exploit

Malicious account Malicious contract Spawned contracts

Conceptual exploit

do a flashloan on BalancerVault receive flashloan spwan contract transfer usdc to spawn1

use spawn1:- setup: enterMarkets for the cToken ebe0d1

    what is cToken and what does enerMarket do?

mint: approve a spender (ebe0d1) for the amount that can be spent

accrueInteret by allowing the spender to spend

    gets money for the cTokens that are now owned becaue we got them from the flashLoan and so we can get interest for it

spender -> mint
    what is this?

    supplies the received amount from flashLoan so that interest accrual can happen

borrow: fETH_127_cEther borrow

borrow an amount (47072970419999996575297) from the fETH_127 cEther token 

this will also trigger fallback:
    exitMarket for ebe0d1 

    we have exited the market without returning the borrowed amount

redeemAll: approve a spender (ebe0d1)

redeemUnderlying

    we get the money back from the cEther token 

usdc transfer to MalContract

    then we send the money to the parent contract. This is the profit we make

weth_contr withdraw 5000..

we use the flashLoan to withdraw 500000.. ETH by using the WETH we got from the flashLoan

fETH_127_cont mint 5000..

then mint fETH_127 tokens usng the 5000.. ETH
meaning, we transfer our ETH nto the protocol to allow it to gain interest

enterMarket (fETH 127)

ebe0d1.borrow

cERC20Delegator.borrow

x8922c.borrow

spawn another contract (x4ec88)

do similarly to setup, mint, borrow with a reentrant exitMarket call, and then redeemAll

once this is done, we deposit 5000.. ETH back to WETH then use this to transfer it to BalancerVault, along with USDC so that the transcation doesn't revert.

In short, we are getting a flashLoan and then using those to enter markets and then mint and borrow money. We can then use the fallback function to reenter into the exitMarket function which absolves us from having to repay the borrowed amount. At the end, we return the money we took from BalancerVault.

Once all this is done, we can use the malicious contract to send the stolen money to our actual account.

clarifications

what is cToken

  • Uses reentrancy