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Submission Details
Severity: high
Valid

The loan ratio formula breaks if tokens do not have 18 decimals which leads to loss of funds or DoS

cosine

Summary

The loan ratio calculation assumes every token has 18 decimals to work, this does not always hold true and can break the system in different ways like for example DoS, or loss of funds.

Vulnerability Details

There are tokens with more or less than 18 decimals, which would break the formula.

The loan ratio formula used multiple times inside Lender.sol:

uint256 loanRatio = (debt * 10 ** 18) / collateral;
if (loanRatio > pool.maxLoanRatio) revert RatioTooHigh();

Impact

Loss of funds by taking out loans with an unfair loan ratio, or DoS as the the loan ratio is always bigger than 100%.

Tools Used

Manual Review, Foundry, VSCode

Recommendations

Update the formula in a way that fits tokens with different precision. The optional decimal function of ERC20 tokens could come in handy to do so.

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