Zero State Return

ZERO_STATE_RETURN Skill (Soroban)

Trigger: Always inject into Arithmetic agent (extends existing ZERO_STATE_ECONOMICS) Purpose: Check protocol return-to-zero state, not just initial zero state Finding prefix: [ZS-N] Rules referenced: R5, R10, R13

Overview

ZERO_STATE_ECONOMICS checks initial zero state. This skill EXTENDS it to cover:

• Protocol returning to zero after normal operations
• Residual assets when LP/share supply returns to zero
• Re-entry vulnerabilities after full exit
• Soroban-specific: i128 division edge cases at zero, empty Instance/Persistent storage states

1. Return-to-Zero Scenarios

After normal operations, can the protocol return to:

2. Residual Asset Check

When LP/share supply returns to zero, check for:

2a. Accrued Rewards / Time-Decay State

• Do rewards or time-decay state persist in Instance/Persistent storage when total_shares = 0?
• If YES → inflates exchange rate for next depositor

2b. Unclaimed Fees / Ratio Snapshot State

• Fee accumulators (performance/management fees) in Instance storage that persist?
• Ratio snapshots (high water marks, benchmarks) reset when all shares burned?
• Can first new depositor capture accumulated fees?

2c. Token Balance Dust

• Can dust remain in contract's token balance after all shares burned?
• Does dust affect exchange rate when total_shares = 0?
• Soroban note: No separate token account to close — balance is in the SEP-41 token's Persistent storage for the contract's address.

2d. Pending Operations

• Pending withdrawal receipts / claim tickets in Persistent storage that persist when total_shares = 0?
• Do sub-contract or cross-contract positions retain allocated funds after all shares burned?

3. Re-Entry Vulnerability Analysis

Does re-entering zero state recreate first-depositor attack conditions?

Key question: Does first-depositor protection apply only on initial initialize() or also on return-to-zero re-deposits?

Soroban-specific: If protection is if total_shares == 0 { require(amount >= MIN_FIRST_DEPOSIT) }, does it fire on return-to-zero? Is MIN_FIRST_DEPOSIT in Instance storage (accessible) or hardcoded?

4. Protocol Reset Functions

Check for admin functions that can force zero state:

• emergency_withdraw() — clears ALL tracked state (totals, accumulators, snapshots)?
• close_vault() — what Persistent/Instance keys persist after calling?
• migrate() — old contract retains residual token balances?
• force_deallocate() — creates accounting mismatch between state and token balance?

Soroban-specific: Instance storage has no single "close all" operation. Verify each DataKey variant is explicitly cleared during reset, not just main accounting keys.

5. Zero-State Return Checklist

## Zero-State Return Analysis for [Contract / Vault]

### Can protocol return to zero state?
- [ ] All users can withdraw / burn shares (no locked funds)
- [ ] total_shares (i128) can reach exactly 0

### What persists when total_shares = 0?
- [ ] Accrued rewards / time-decay state: [amount / none]
- [ ] Protocol fees / ratio snapshots: [amount / none / resets]
- [ ] Token balance dust: [yes / no]
- [ ] Pending operations in Persistent storage: [list / none]
- [ ] Sub-contract allocations: [zeroed / residual]

### Re-entry vulnerability?
- [ ] Initial zero state protected: [yes / no / how]
- [ ] Return-to-zero state protected: [yes / no / how]
- [ ] Same protection mechanism: [yes / no]

### Exchange rate at return-to-zero:
- [ ] Formula: [show calculation using i128 values]
- [ ] With residual X: [panic? wrong value?]
- [ ] Can attacker inflate rate before re-entry: [yes / no]

5b. Default / Uninitialized State Values

For each state variable used in arithmetic or control flow, check its initial value before any user interaction:

• Missing key returns None: e.storage().instance().get::<_, i128>(&DataKey::X) returns None if never written. unwrap() panics; unwrap_or(0) silently treats as 0.
• First-call path: Trace FIRST invocation of each state-modifying function. Does it assume initialize() already set dependent keys?
• Signed zero vs missing: Soroban storage does NOT default to 0 — absent keys return None. Confusion between "key present with value 0" and "key absent" can cause bugs.

6. Code Patterns to Check

// Pattern 1: Guard covers initial zero only — what about return-to-zero?
if vault.total_shares == 0i128 {
    return Ok(1_000_000i128); // 1:1 rate
}
// QUESTION: What if total_shares returns to 0 but token balance > 0?

// Pattern 2: i128 exchange rate with division by zero
let rate = vault.total_value
    .checked_div(vault.total_shares)
    .ok_or(Error::DivisionByZero)?;
// QUESTION: What if total_value > 0 and total_shares = 0?

// Pattern 3: First deposit protection
if vault.total_shares == 0i128 {
    require!(deposit_amount >= MIN_FIRST_DEPOSIT, Error::DepositTooSmall);
}
// QUESTION: Does this fire for RE-deposits after full exit?

// Pattern 4: Time-decay state
let unlocked = vault.decay_amount * elapsed_ledgers / DECAY_DURATION_LEDGERS;
// QUESTION: Does decay_amount persist when total_shares = 0?

7. Finding Template

**ID**: [ZS-N]
**Severity**: [typically HIGH if funds extractable]
**Location**: src/{file}.rs:LineN
**Title**: Return-to-zero state allows [attack] due to [residual state in storage]
**Description**:
- Protocol can return to total_shares=0 via [mechanism]
- When this happens, [storage key] retains value of [amount] (i128)
- A new depositor can [exploit path]
**Impact**: [Fund extraction / exchange rate manipulation / unfair distribution]
**PoC Scenario**:
1. Users deposit and earn rewards
2. All users withdraw, total_shares = 0i128
3. Residual state remains: {DataKey::DecayAmount} = X in Instance storage
4. Attacker deposits minimum amount
5. Attacker claims X rewards via inflated share-to-value ratio

8. Integration with ZERO_STATE_ECONOMICS

This skill does NOT replace ZERO_STATE_ECONOMICS. It EXTENDS it:

When applying ZERO_STATE_ECONOMICS, ALSO apply ZERO_STATE_RETURN.