Summary

“If the value of the debt drops near to 100% of the amount of the token, it becomes unpayable

Vulnerability Details

 function liquidate(address collateral, address user, uint256 debtToCover)
    external
    moreThanZero(debtToCover)
    nonReentrant
{
    // need to check health factor of the user
    uint256 startingUserHealthFactor = _healthFactor(user);
    if (startingUserHealthFactor >= MIN_HEALTH_FACTOR) {
        revert DSCEngine__HealthFactorOk();
    }
    // We want to burn their DSC "debt"
    // And take their collateral
    // Bad User: $140 ETH, $100 DSC
    // debtToCover = $100
    // $100 of DSC == ??? ETH?
    // 0.05 ETH
    uint256 tokenAmountFromDebtCovered = getTokenAmountFromUsd(collateral, debtToCover);
    // And give them a 10% bonus
    // So we are giving the liquidator $110 of WETH for 100 DSC
    // We should implement a feature to liquidate in the event the protocol is insolvent
    // And sweep extra amounts into a treasury
    // 0.05 * 0.1 = 0.005. Getting 0.055
    uint256 bonusCollateral = (tokenAmountFromDebtCovered * LIQUIDATION_BONUS) / LIQUIDATION_PRECISION;
    uint256 totalCollateralToRedeem = tokenAmountFromDebtCovered + bonusCollateral;
    _redeemCollateral(user, msg.sender, collateral, totalCollateralToRedeem);
    // We need to burn the DSC
    _burnDsc(debtToCover, user, msg.sender);

    uint256 endingUserHealthFactor = _healthFactor(user);
    if (endingUserHealthFactor <= startingUserHealthFactor) {
        revert DSCEngine__HealthFactorNotImproved();
    }
    _revertIfHealthFactorIsBroken(msg.sender);
}

when call liquidate this call

      function _redeemCollateral(address from, address to, address tokenCollateralAddress, uint256 amountCollateral)
    private
{
    console.log("s_collateralDeposited[from][tokenCollateralAddress]:",s_collateralDeposited[from][tokenCollateralAddress]);
    console.log("amountCollateral:",amountCollateral);
    s_collateralDeposited[from][tokenCollateralAddress] -= amountCollateral;
    emit CollateralRedeemed(from, to, tokenCollateralAddress, amountCollateral);
    bool success = IERC20(tokenCollateralAddress).transfer(to, amountCollateral);
    if (!success) {
        revert DSCEngine__TransferFailed();
    }
} 

And this reverts due to arithmetic over/underflow when trying to perform this operation: s_collateralDeposited[from][tokenCollateralAddress] -= amountCollateral

runt this test in DSCEngineTest.t.sol

  function test__Liquidation_fail() public  {

    vm.startPrank(user);
    ERC20Mock(weth).approve(address(dsce), amountCollateral);
    dsce.depositCollateralAndMintDsc(weth, amountCollateral, amountToMint);
    vm.stopPrank();
  

    //*******in this point user is liquiditable*********** 
    MockV3Aggregator(ethUsdPriceFeed).updateAnswer(10e8);//***********  dropps the price **************
    uint256 userHealthFactor = dsce.getHealthFactor(user);

    ERC20Mock(wbtc).mint(liquidator, amountToMint);
    ERC20Mock(wbtc).mint(address(dsce), amountToMint);
    vm.startPrank(liquidator);
    ERC20Mock(wbtc).approve(address(dsce), amountCollateral);
    dsce.depositCollateralAndMintDsc(wbtc, amountCollateral, amountToMint);
    vm.stopPrank();

    console.log("value of debt in collateral",dsce.getTokenAmountFromUsd(wbtc, amountToMint));

    vm.startPrank(liquidator);
    dsc.approve(address(dsce), amountToMint);
    dsce.liquidate(weth, user, 100 ether); 
    vm.stopPrank();

 

}

the result

Running 1 test for test/unit/DSCEngineTest.t.sol:DSCEngineTest
[FAIL. Reason: Arithmetic over/underflow] 
test__Liquidation_fail() (gas: 562459)
Logs:
  value of debt in collateral 100000000000000000
  tokenAmountFromDebtCovered: 10000000000000000000
  totalCollateralToRedeem: 11000000000000000000
  s_collateralDeposited[from][tokenCollateralAddress]: 10000000000000000000
  amountCollateral: 11000000000000000000

Test result: FAILED. 0 passed; 1 failed; finished in 605.33ms

Failing tests:
Encountered 1 failing test in 
test/unit/DSCEngineTest.t.sol:DSCEngineTest
[FAIL. Reason: Arithmetic over/underflow] 
test__Liquidation_fail() (gas: 562459)

Encountered a total of 1 failing tests, 0 tests succeeded

Impact

debts unpayables are bad for the protocol

Tools Used

manual review

Recommendations

change this logic of liquidation