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Perfect Yellow Fox

High

Permanent Fund Locking in Auction Bidding Due to Incompatible Refund Mechanism

Vulnerability Details The auction contract's bid refund mechanism fails when a bidder's address (contract) cannot receive ETH or WETH, potentially trapping previous bid funds and disrupting auction functionality.

NounAuctionHouseV3::createBid and NounAuctionHouseV2::createBid

Impact A malicious actor could create a contract that prevents bid refunds, effectively blocking future auction participation and locking user funds.

Proof of Concept

  • Create a contract that cannot receive ETH or WETH
  • Place a bid in the auction
  • Subsequent higher bids will fail to refund the previous bid
  • Auction becomes functionally blocked

Recommended Mitigation

  • Implement a pull-based withdrawal pattern
  • Add explicit checks for contract fund receiveability