SwapOperations swapFee is non deterministic and can cause people to lose funds

mediumRecon Audits

Impact

SwapOperations charges a fee that is computed by SwapPair as follows:

https://github.com/blkswnStudio/ap/blob/8fab2b32b4f55efd92819bd1d0da9bed4b339e87/packages/contracts/contracts/SwapPair.sol#L187-L209

solidity📋
  function getSwapFee(uint postReserve0, uint postReserve1) public view override returns (uint feePercentage) {
    address nonStableCoin = token1; // find stable coin
    if (tokenManager.isDebtToken(nonStableCoin) && totalSupply > 0) {
      // query prices
      (uint oraclePrice, ) = priceFeed.getPrice(nonStableCoin); /// @audit not validated for staleness
      uint preDexPrice = _getDexPrice(reserve0, reserve1); /// @audit this is spot and can be altered in some way
      uint postDexPrice = _getDexPrice(postReserve0, postReserve1);

      // only apply the dynamic fee if the swap trades against the oracle peg
      if ( /// @audit ??? | No deviation threshold | Spot vs Oracle (Donate to reserves?)
        (postDexPrice > oraclePrice && postDexPrice > preDexPrice) ||
        (postDexPrice < oraclePrice && preDexPrice > postDexPrice)
      ) {
        uint avgDexPrice = (preDexPrice + postDexPrice) / 2;
        uint priceRatio = (oraclePrice * DECIMAL_PRECISION) / avgDexPrice; // 1e18
        return
          _calcFee(priceRatio > DECIMAL_PRECISION ? priceRatio - DECIMAL_PRECISION : DECIMAL_PRECISION - priceRatio) +
          swapOperations.getSwapBaseFee();
      }
    }

    return swapOperations.getSwapBaseFee();
  }

The fee uses the previous "spot ratio" and compares it against the new pre-fee "spot ratio"

This means that any transaction that alters the reserves between when a user signs their transaction and when it get's included in a block may alter the fee that a user pays

This creates scenario where, if a minority of users owns the majority of the LP tokens, they can perform donations to front-run swaps, which will cause benign users to pay an additional fee that they didn't intend to pay

Mitigation

Add an explicit check for the fees that will be paid on a swap as to ensure that's intended or within an acceptable range