README.md

vulnerable/flash_loan_no_check

Vulnerability: Flash Loan Without Repayment Check

Severity: Critical

Description

The flash loan function transfers tokens to the borrower but does not verify repayment before returning. An attacker can borrow the entire pool and never repay, draining the contract.

Exploit Scenario

1. Attacker calls flash_loan(attacker, pool_balance).
2. Contract transfers tokens to attacker.
3. Attacker does not repay; contract returns without checking the balance was restored.
4. Attacker keeps the tokens.

Vulnerable Code

pub fn flash_loan(env: Env, borrower: Address, amount: i128) {
    transfer_out(&env, &borrower, amount);
    // ❌ Missing repayment check
}

Secure Fix

pub fn flash_loan(env: Env, borrower: Address, amount: i128) {
    let balance_before = get_pool_balance(&env);
    transfer_out(&env, &borrower, amount);
    // borrower executes their logic here (via callback or same tx)
    let balance_after = get_pool_balance(&env);
    assert!(balance_after >= balance_before, "flash loan not repaid"); // ✅
}

See the inline secure.rs module inside this crate for the full corrected implementation.

References

• docs/vulnerabilities.md
• docs/threat_model.md