From e8f5568d35502bc8e0d7ebf5597976b5205be0c7 Mon Sep 17 00:00:00 2001
From: Taylor Brent <taylor.w.brent@gmail.com>
Date: Wed, 9 Aug 2023 16:56:59 -0400
Subject: [PATCH] C4 #29 (#885)

---
 contracts/p0/Furnace.sol | 10 ++++++++--
 contracts/p1/Furnace.sol | 10 ++++++++--
 test/Furnace.test.ts     | 39 +++++++++++++++++++++++++++++++++++++++
 3 files changed, 55 insertions(+), 4 deletions(-)

diff --git a/contracts/p0/Furnace.sol b/contracts/p0/Furnace.sol
index 869a3eff7..aa99a8140 100644
--- a/contracts/p0/Furnace.sol
+++ b/contracts/p0/Furnace.sol
@@ -58,8 +58,14 @@ contract FurnaceP0 is ComponentP0, IFurnace {
     /// Ratio setting
     /// @custom:governance
     function setRatio(uint192 ratio_) public governance {
-        // solhint-disable-next-line no-empty-blocks
-        try this.melt() {} catch {}
+        if (lastPayout > 0) {
+            // solhint-disable-next-line no-empty-blocks
+            try this.melt() {} catch {
+                uint48 numPeriods = uint48((block.timestamp) - lastPayout) / PERIOD;
+                lastPayout += numPeriods * PERIOD;
+                lastPayoutBal = main.rToken().balanceOf(address(this));
+            }
+        }
         require(ratio_ <= MAX_RATIO, "invalid ratio");
         // The ratio can safely be set to 0, though it is not recommended
         emit RatioSet(ratio, ratio_);
diff --git a/contracts/p1/Furnace.sol b/contracts/p1/Furnace.sol
index 3259e48fd..923ba3373 100644
--- a/contracts/p1/Furnace.sol
+++ b/contracts/p1/Furnace.sol
@@ -90,8 +90,14 @@ contract FurnaceP1 is ComponentP1, IFurnace {
     /// Ratio setting
     /// @custom:governance
     function setRatio(uint192 ratio_) public governance {
-        // solhint-disable-next-line no-empty-blocks
-        if (lastPayout > 0) try this.melt() {} catch {}
+        if (lastPayout > 0) {
+            // solhint-disable-next-line no-empty-blocks
+            try this.melt() {} catch {
+                uint48 numPeriods = uint48((block.timestamp) - lastPayout) / PERIOD;
+                lastPayout += numPeriods * PERIOD;
+                lastPayoutBal = rToken.balanceOf(address(this));
+            }
+        }
         require(ratio_ <= MAX_RATIO, "invalid ratio");
         // The ratio can safely be set to 0 to turn off payouts, though it is not recommended
         emit RatioSet(ratio, ratio_);
diff --git a/test/Furnace.test.ts b/test/Furnace.test.ts
index de3a60261..15776210b 100644
--- a/test/Furnace.test.ts
+++ b/test/Furnace.test.ts
@@ -446,6 +446,45 @@ describe(`FurnaceP${IMPLEMENTATION} contract`, () => {
 
       expect(diff).to.be.lte(expectedDiff)
     })
+
+    it('Regression test -- C4 June 2023 Issue #29', async () => {
+      // https://github.com/code-423n4/2023-06-reserve-findings/issues/29
+
+      // Transfer to Furnace and do first melt
+      await rToken.connect(addr1).transfer(furnace.address, bn('10e18'))
+      await setNextBlockTimestamp(Number(await getLatestBlockTimestamp()) + Number(ONE_PERIOD))
+      await furnace.melt()
+
+      // Should have updated lastPayout + lastPayoutBal
+      expect(await furnace.lastPayout()).to.be.closeTo(await getLatestBlockTimestamp(), 12)
+      expect(await furnace.lastPayout()).to.be.lte(await getLatestBlockTimestamp())
+      expect(await furnace.lastPayoutBal()).to.equal(bn('10e18'))
+
+      // Advance 99 periods -- should melt at old ratio
+      await setNextBlockTimestamp(Number(await getLatestBlockTimestamp()) + 99 * Number(ONE_PERIOD))
+
+      // Freeze and change ratio
+      await main.connect(owner).freezeForever()
+      const maxRatio = bn('1e14')
+      await expect(furnace.connect(owner).setRatio(maxRatio))
+        .to.emit(furnace, 'RatioSet')
+        .withArgs(config.rewardRatio, maxRatio)
+
+      // Should have updated lastPayout + lastPayoutBal
+      expect(await furnace.lastPayout()).to.be.closeTo(await getLatestBlockTimestamp(), 12)
+      expect(await furnace.lastPayout()).to.be.lte(await getLatestBlockTimestamp())
+      expect(await furnace.lastPayoutBal()).to.equal(bn('10e18')) // no change
+
+      // Unfreeze and advance 1 period
+      await main.connect(owner).unfreeze()
+      await setNextBlockTimestamp(Number(await getLatestBlockTimestamp()) + Number(ONE_PERIOD))
+      await expect(furnace.melt()).to.emit(rToken, 'Melted')
+
+      // Should have updated lastPayout + lastPayoutBal
+      expect(await furnace.lastPayout()).to.be.closeTo(await getLatestBlockTimestamp(), 12)
+      expect(await furnace.lastPayout()).to.be.lte(await getLatestBlockTimestamp())
+      expect(await furnace.lastPayoutBal()).to.equal(bn('9.999e18'))
+    })
   })
 
   describeExtreme('Extreme Bounds', () => {