Appsmith is an open-source developer tool designed to help organizations build internal applications, such as dashboards, admin panels, and customer support tools. It has three roles - admin, developer and app viewer.
Appsmith has datasources that allows applications to use information from various databases and other endpoints - many of these run locally. One of these, configured by default, is a PostgreSQL database. The configuration of this server allows for the logging into the database as any user without providing a password. This is done via a server-side connection.
The interaction with PostgreSQL requires a valid account. Although the app requires an invitation for current workspaces, its default configuration allows for user signup! A user can then configure their own workspaces and application to expose the vulnerable functionality.
The application, that the user is able to create, allows for login as the superuser of Postgres via the web console. Using this, it's possible to call cat /etc/passwd on a SQL query. Since this is the super user, it's effectively game over.
There are two other bugs but this one was by far the most interesting. Good find!