Audit Auction

Auction Manipulation Auditor

When to Use

• Auditing auction mechanisms, Dutch auctions, liquidation auctions
• User mentions: auction, bid, Dutch auction, auction timer, auction length, sequencer downtime, seizure
• Analyzing auction timing, bid validation, auction parameters
• Reviewing liquidation auctions, loan auctions, NFT auctions

Audit Workflow

IMPORTANT: Announce skill usage at the start of analysis

Begin with: "I'm using the audit-auction skill to analyze this contract for auction manipulation vulnerabilities..."

1. Scan for auction operations

   • Search: auction, bid, startAuction, endAuction, auctionEnd, auctionLength, buyLoan, seize, settle
   • Focus: timer resets, length validation, timestamp checks, sequencer integration

2. Check against vulnerability patterns

   • Reference reference.md for complete checklist
   • Compare code against example.md

3. Validate exploitability

   • Check access control first - grep for onlyOwner|onlyAdmin|onlyGovernance modifiers
   • Can non-privileged actors exploit auction manipulation?
   • Can borrower reset auction by self-bidding?
   • Can auctions start during sequencer downtime?
   • Are auction lengths validated (minimum duration)?
   • Are timestamp comparisons correct (no off-by-one)?
   • Verify no compensating protections exist
   • Downgrade severity if admin-only unless enables borrower manipulation

4. Generate report

   • Use deliverable template below
   • Include manipulation scenarios and PoC
   • Rank by severity

Core Vulnerability Patterns

See reference.md for full checklist. Key patterns:

1. Self-bidding to reset auction → borrower buys own loan to restart timer indefinitely
2. Auction start during sequencer downtime → L2 sequencer issues affect fairness
3. Insufficient auction length validation → 1-second auctions allow immediate seizure
4. Auction seizure during active period → off-by-one allows premature seizure

Code examples: See example.md

Severity Criteria

Critical: Self-bidding allowing infinite auction extensions, off-by-one enabling immediate seizure bypassing auction period, MUST be exploitable by non-privileged actors High: Insufficient length validation allowing very short auctions, sequencer downtime affecting auction fairness on L2, MUST be exploitable by non-privileged actors Medium: Suboptimal auction parameters, missing events for auction state changes, admin-only auction configuration issues with cascading borrower impact Low: Gas inefficiencies in auction logic, missing view functions, admin-only parameter issues without immediate borrower impact

IMPORTANT: Admin-only auction functions (onlyOwner, onlyAdmin, onlyGovernance) are MEDIUM or LOW severity unless:

• Admin can start auctions during sequencer downtime without checks
• Missing validation in auction length setters allows admin to set 1-second auctions
• Admin auction timing configuration enables unfair seizure of borrower collateral

False Positives - Do NOT Flag

• Protocols with explicit self-bidding allowed (documented)
• L1-only deployments (no sequencer concerns)
• Admin-only auction start (trusted operation)
• Intentional short auctions with documented rationale
• Test/mock auction contracts
• Admin-only auction start functions (onlyOwner, onlyAdmin) with sequencer uptime checks on L2
• Governance-controlled auction length parameters with minimum bounds validation (e.g., >= 1 hour)
• Admin functions for emergency auction settlement with documented safeguards

Deliverable Format

MANDATORY: Before deliverable, verify each checklist.md item against codebase. Flag violations as findings.

Use template: templates/report-template.md

Each finding includes: severity, pattern #, file/lines, description, vulnerable code, manipulation scenario, PoC, remediation.

Key Principles

• No self-bidding - prevent borrower from bidding on own auction
• Sequencer awareness - check sequencer uptime before auction start on L2
• Minimum duration - enforce reasonable minimum (e.g., 1 hour)
• Correct comparisons - use >= not >, avoid off-by-one
• Timer integrity - prevent auction timer resets

Output Guidelines

DO:

• Reference specific lines and functions
• Provide manipulation scenarios with timing
• Show PoCs demonstrating auction abuse
• Calculate impact of timing exploits
• Map all auction state transitions

DON'T:

• Report intentional design choices (short auctions with rationale)
• Flag missing features with alternative mechanisms
• Ignore timestamp precision (critical for fairness)
• Miss edge cases (exact timestamp boundaries)