Beedle - Oracle free perpetual lending

Summary

The pool's interestRate is assigned to the loan without the borrower having the possibility to define a maximum value. This allows the pool lender to front-run the borrower by calling the borrow or refinance function and setting the maximum possible interestRate value, i.e., MAX_INTEREST_RATE. This results in a very high interest payment for the borrower.

Vulnerability Details

If a user/borrower calls the borrow or refinance functions, the pool lender can front-run and change the pool's interestRate to an unfavorable (for the borrower) and very high value (e.g., MAX_INTEREST_RATE) by using the setPool function. This results in a very high interest payment for the borrower, calculated in the _calculateInterest function.

• The borrow function assigns the pool.interestRate to the loan in L256

• The refinance function updates the loan's auction length to the pool.interestRate in L688

Impact

Unnecessary and unexpected high interest rate for the borrower.

Tools Used

Manual Review

Recommendations

Consider allowing the borrower to define a maximum interest rate when borrowing or refinancing and validate if the pool fulfills this criterion.