20,000 USDC
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Submission Details
Severity: medium

Lenders can cause the lender not to get their loan debt causing loss of funds

Summary

Lenders can gang up on and cause the loan to seizeLoan

Vulnerability Details

Lenders can gang up on the lender and make sure his loan gets seized and if the collateral=loan like most defi protocols
The fee will cause the lender a loss

IERC20(loan.collateralToken).transfer(
loan.lender,
loan.collateral - govFee
);

Impact

Not a good situation that lenders should not be in
This attack is

  1. unlikely to happen since lenders won't grief if the loan is profitable unless they are trying to gang up for some certain unlikely reason which is a possibility.

  2. Requires all of them not to take the loan which for a permissionless system is likely impossible. Again if the loan is high value then it's not permissionless anymore and not everyone is a lender. So that is why this attack is medium severity.

Tools Used

Recommendations

Not much you can do in this scenario besides slashing the lenders who wont take the loan or having the protocol have emergency lender

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