20,000 USDC
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Submission Details
Severity: medium
Valid

Pool owner can front-run innocent user and significantly increase interest rate

Summary

A pool owner can front-run a user taking a loan and significantly increase the interest rate of the loan.

Vulnerability Details

Upon taking a loan, all a user specifies is the pool, the borrow amount they want and the collateral they're willing to provide, but there is no protection on the interest rate. A pool owner can set a low interest rate to attract users and start monitoring the mempool. Upon seeing a user transaction for a loan, the pool owner can front-run it and significantly increase the interest rate and turn the loan into conditions which the user would see as unacceptable.

Impact

User will take a loan at much higher interest rate than expected

Tools Used

Manual review

Recommendations

Add a param to the Borrow struct which is the max interest rate the user is willing to pay. Upon taking a borrow, make sure this value >= the interest rate of the pool.

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