Get the Crypto Payment Security & Compliance Playbook
Back to Blog

Beyond the Market Risk: A Logic Bug Identified in SushiSwap's KashiPairMediumRiskV1 Contract

Code Auditing
December 15, 2022

On Nov 08, 2022, we detected that some attacks successfully drained assets from pools that are built on top of Sushi’s official KashiPairMediumRiskV1 contract(or some contracts that fork from it). After investigation, we found that the root cause is due to a logic bug that causes the miscalculation of the token prices.

We immediately contacted Sushi's security team, and they confirmed our findings. The good thing was that they were taking action to protect some valuable but vulnerable pools from being attacked. Besides, they also provided procedures to compensate those that lost funds from the exploit. As such, we now believe it is safe to disclose the details about the vulnerability and the attacks. In this report, we'd like to provide a detailed analysis.

Vulnerability Analysis

After anaylzing the source code of the KashiPairMediumRiskV1 contract, we conclude that this bug lies in the borrow function, which uses the outdated exchangeRate to verify the borrow share in the solvent modifier. Specifically, the verification will be performed based on the current value of exchangeRate in the _isSolvent function.

While in the liquidate function, the updateExchangeRate function is invoked at the very beginning. Hence the verfication and calculation will be performed based on the updated value.

Obviously, this bug could be exploited to lead to a (huge) price difference.

Attack Analysis

We observed two attacks:

  1. 0xcf8f242ea83100b6d43e659f7f53a698d304fc6ac2ca6fe79e3e07ee05fefe58: the victim uses the KashiPairMediumRiskV1 contract, and the loss is around 9,466 USDC.
  2. 0x3d163bfbec5686d428a6d43e45e2626a220cc4fcfac7620c620b82c1f2537c78: the victim is a strategy contract uses CauldronMediumRiskV1 (the fork of KashiPairMediumRiskV1), and the loss is around 110,911 MIM.

Note that, the first attack transaction was launched by a bot which front-runs the original attack transaction: 0x7a845d8d2af7919f5b9e22dd5571305cb5347d17986a8402715c1463d515fc18, and the original attacker address is 0xb7ea0f0f8c6df7a61bf024db21bbe85ac5688005.

Here we take the first attack transaction as an example, which consists of the following steps:

  1. Borrowing a flashloan of 40,900 BADGER and 121,904 USDC from Balancer.
  2. Depositing 40,900 BADGER and 113,599 USDC to BentoBox.
  3. Invoking the addCollateral function of kmBADGER/USDC-LINK to deposit 40,900,000,000,000,000,000,000 shares of BADGER.
  4. Invoking the addAsset function of kmBADGER/USDC-LINK to deposit 112,529,000,000 shares of USDC.
  5. Invoking the borrow function to borrow 120,755,095,093 shares of USDC.
  6. Invoking the UpdateExchangeRate function.
  7. Invoking the liquidate function to liquidate itself.
  8. Withdraw 40,899 BADGER and 123,006 USDC from BentoBox.
  9. Repaying the flashloan and obtaining a profit of about 9466 USDC.

Note that step 6 is not necessary, because the borrow function will invoke the UpdateExchangeRate function.

The key steps are as follows:

It is not difficult to figure that the value of exchangeRate used in the borrow function deviates from the value used in the liquidate function:

  • In the borrow function: 250,997,938,545,109,237,740,214,705,193
  • In the liquidate function: 328,266,883,541,864,569,505,752,156,794

The Impact

There are dozens of pools (on both Ethereum and BSC) that might be affected by this bug. A temporary method to mitigate this issue is to reduce or eliminate the deviation by invoking the UpdateExchangeRate function occasionally (or periodically). This method has already been adopted by many affected projects and the corresponding transactions can be observed in the wild.

Takeaway

Making a DeFi project secure is not an easy job. Besides the code audit, we think the community should take a proactive method to monitor the project status, and block the attack before it even takes place.

About BlockSec

BlockSec is a pioneering blockchain security company established in 2021 by a group of globally distinguished security experts. The company is committed to enhancing security and usability for the emerging Web3 world in order to facilitate its mass adoption. To this end, BlockSec provides smart contract and EVM chain security auditing services, the Phalcon platform for security development and blocking threats proactively, the MetaSleuth platform for fund tracking and investigation, and MetaDock extension for web3 builders surfing efficiently in the crypto world.

To date, the company has served over 300 esteemed clients such as MetaMask, Uniswap Foundation, Compound, Forta, and PancakeSwap, and received tens of millions of US dollars in two rounds of financing from preeminent investors, including Matrix Partners, Vitalbridge Capital, and Fenbushi Capital.

Official website: https://blocksec.com/

Official Twitter account: https://twitter.com/BlockSecTeam

Sign up for the latest updates
~$320M Lost: Liquid Network, Symbiosis Exploits | BlockSec
Security Insights

~$320M Lost: Liquid Network, Symbiosis Exploits | BlockSec

This report, covering 2026/09/07 - 2026/09/13, examines two security incidents that caused approximately $320M in losses, including the Liquid Network exploit of 2026/09/06 that the previous report did not cover. The larger was that Liquid Network exploit, where the rangeproof validation cache in Elements derived its key by hashing four fields — two of them variable in length — concatenated with nothing marking the boundaries between them, so a verdict recorded for one output was returned for another whose proof was never examined, letting the attacker create 4,000 unbacked L-BTC and peg out nearly all of them as bitcoin. On the Bitcoin route of the Symbiosis cross-chain bridge, spanning BNB Smart Chain, Ethereum and Rootstock, off-chain code that reads Bitcoin deposits took the depositor's identity from a field the depositor controls and then subtracted its fee from the deposit without checking whether the fee itself was negative, letting a 330-satoshi deposit mint `46,116,860,184.27388234 syBTC`; the pools it had to be sold through held only 11.26 syBTC, so the loss to liquidity providers and users came to an estimated 9.97 BTC (~$770K).

~$9.4M Lost: Injective, Aquifer Exploits | BlockSec Weekly
Security Insights

~$9.4M Lost: Injective, Aquifer Exploits | BlockSec Weekly

During the past week (2026/08/31 - 2026/09/06), four security incidents caused approximately $9.4M in losses across Injective, Solana, Ethereum, and Flow EVM. The largest was the Injective exploit, where an insurance fund identifier collided with a binary options market identifier and the settlement path never compared their denominations, draining about $4.8M; Aquifer on Solana lost about $2.47M because its swap path invoked an unvalidated caller-supplied Token Program, and Notional Finance V1 on Ethereum lost about $1.73M to an unchecked `uint128` cast that valued a debt at zero. Ankr FLOW on Flow EVM closed out the week with about $410K drained through a staking entry point that skipped its pause guard and minted against a stale ratio.

From Incidents to Regulation: Why Crypto Institutions Need Blockchain Penetration Testing
Security Services

From Incidents to Regulation: Why Crypto Institutions Need Blockchain Penetration Testing

Exchanges, payment firms, custodians, and wallet providers now lose the most money beyond the smart contract—in signing, custody, keys, people, and supply chains. Code-level audit and transaction-level monitoring each leave a gap, and traditional penetration tests may miss crypto's signing and fund semantics. This article opens our blockchain penetration testing series with the two legs of the case for institutions in scope: where the risk actually comes from, and how NYDFS, DORA, VARA, SFC, and MAS treat adversarial testing across five jurisdictions.

Best Security Auditor for Web3

Validate design, code, and business logic before launch. Aligned with the highest industry security standards.

BlockSec Audit
Beyond the Market Risk: A Logic Bug Identified in SushiSwap's KashiPairMediumRiskV1 Contract