Resources

People often ask me "How did you learn how to hack?" The answer: by reading. This page is a collection of the blog posts and other articles that I have accumulated over the years of my journey. Enjoy!

Rodeo Finance is a leveraged yield farming protocol. Apparently, it also supports loan functionality.

The service was uses a price oracle to determine the price of assets when borrowing and lending. In particular, it was using a Time Weighted Average Prices (TWAP) which averages out the price over a given interval. This prevents instantaneous changes in the price from manipulation. In this case, updates were every 45 minutes and looking at the previous 4.

TWAP oracle are vulnerable when their price is being updated. By sandwiching price updates, it's possible to get a position briefly for some amount of money, see the update occur, then make money from the update even though very little funds were provided.

The attacker manipulated the price by performing a sandwich attack on its source - ETH-unshETH pool - over the 3 updates. By sandwiching the update process, the attacker was able to get all of their money back but was still able to manipulate the price.

This was a risky tactic. At any point, the oracle protocol could have been arbitraged to steal funds but was not. Once the TWAP had the inflated price, the attacker opened multiple large leveraged positions.

To eventually make money, they borrowed much more funds than they should have been able to. Since the oracle price was manipulated, they were also able to arbitrage it by swapping with the same pool as they manipulated. This led to a massive price difference from the amount that was swapped by the Rodeo Finance Protocol.

According the Quill Audits, there is another aspect to this though. The strategy address was unconfigured, which allowed for bypassing the sanity check on the values being used.

What was wrong then? The oracle used the reserve ratio to determine the price. Additionally, multiple oracles should be used to prevent attacks like this. Or, have limits on how much the price can change over a given interval.