Incident Overview
On August 28, 2024, Aave’s periphery contract, specifically the Repay With Collateral Adapter V3, was exploited, resulting in a loss of $56,000 USD across multiple chains.
The vulnerability was rooted in the _buyOnParaSwap function within the Aave Collateral Repay Adapter V3 contract. The function, which interacted with the Paraswap contract, left a high token allowance unadjusted if a swap failed or was only partially executed. This unadjusted allowance allowed the attacker to withdraw unauthorized tokens.
The vulnerability arose because the function did not properly validate or sanitize paraswapData and failed to verify the swap outcome. The attacker crafted malicious paraswapData, manipulating the swap process or avoiding it entirely. By exploiting the unchecked token allowance, the attacker bypassed the intended swap logic, enabling unauthorized fund transfers from the contract.
Exploiter:
https://etherscan.io/address/0x6ea83f23…C296DC
Exploit tx:
https://etherscan.io/tx/0xc27c3ec6…b0e9de
Incident Report
What the Attacker Needed to Succeed
Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.
What Auditors Should Check
If you're auditing a protocol with similar architecture to Aave, these are the critical security checks that could have prevented this incident (August 2024).
- Verify all logic paths related to Other are guarded by proper access controls and input validation
- Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs
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