Submission Details
Severity:
Borrower can put up a loan which is immediately "insolvent" which can immediately be auctioned off.
Vulnerability Details
Borrowing and lending protocols generally have a seperate liquidation price and maximum intiial loan price. This prevents users from taking a loan which can immediately be liquidated.
Impact
Lack of this check allows borrowers to shoot themselves in the foot by taking a loan that can immediately be liquidated
Tools Used
Manual Review
Recommendations
Set a different loanRatio for entering a position compared to auctioning off a position
Prize pool breakdown
Total prize
20,000 USDC
nSLOC
70628 USDC / LOC
18,000 USDC
2,000 USDC
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