Sablier Developmental Exploit

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Sablier

During an early version of the smart contract, the Sablier platform found that it was vulnerable. Users of this early platform version would have provided full access to their ethereum (ERC20) wallet, which would have exposed them to the full risk.

The issue was ultimately fixed before it was exploited and Sablier continues to operate.

This is a global/international case not involving a specific country.

About Sablier

"Paydays don't make sense any more. Sign up below to have instant access to your earnings through a money protocol built on Ethereum." "On Sablier, time means money, literally. As a worker, you see your earnings increasing in real-time in the Sablier wallet. As an organisation, our technology helps you get rid of the hassle of payroll admin. After a one-time deposit, our smart contracts will start "streaming" the money towards the payees, without you lifting a finger again."

"With Ethereum's native ETH token it is possible to call a smart contract function and send ETH to the contract at the same time. This is done using so-called payable functions. But because ERC20 tokens are smart contracts themselves, there is no way to directly send tokens to a smart contract while also calling one of its functions."

"Instead, the ERC20 standard allows smart contracts to transfer tokens on behalf of users - with the transferFrom() function. To do so, the user needs to allow the smart contract to transfer those tokens on their behalf."

"This way, a user can "deposit" tokens into a smart contract, and at the same time, the smart contract can update its state to reflect the deposit. In contrast, if you just send ERC20 tokens to the contract, the contract cannot update its state (e.g. to credit the deposit to your account)."

"If you want to use ERC20 tokens on DeFi protocols such as Uniswap, Aave, and Year, you need to authorize the dApp to use these tokens. This is the so-called ERC20 authorization . These authorizations are essential for the operation of the DeFi platform, but if they are not controlled, it will be very dangerous."

"However, this setup comes with significant drawbacks. As we know, bugs can exist and exploits can happen even in established projects. And by giving these platforms an unlimited allowance, you do not only expose your deposited funds to these risks, but also the tokens that you're holding "safely" in your wallet."

"Paul Berg ... found (and fixed!) a bug in his smart contracts, where not only the deposited DAI ($100) were at risk, but also all DAI in the testers' wallets ($10k)!" "This event [was] part of Osaka Blockchain Week (Devcon 5)."

"For a long time the risk of unlimited allowances was largely theoretical, and Paul's Sablier bug was fixed before the platform went into production. Back then there hadn't been any exploits that took advantage of ERC20 allowances, but it was bound to happen as platforms kept using unlimited allowances."

"In [his] speech, Paul mentioned some solutions to the problem of unlimited authorization. Each of these programs has advantages and disadvantages. One of the most practical solutions is the batch-to-use model. In this mode, the application will only ask the user to authorize the exact amount, rather than unlimited."

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Sablier Developmental Exploit

Date	Event	Description
October 8th, 2019	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $10,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

In general, one should consider smart contract security to be similar to hot wallet security. The funds are online and accessible in the event of a breach.

While there are a number of steps which can be taken to reduce the risk, such as not giving unlimited permissions, auditing the smart contract, and exercising caution and due diligence on each contract, the best security continues to be offline storage with a multi-signature arrangement where multiple known people approve large withdrawals.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.