Summary

Ethereum gas prices can rise significantly

Vulnerability Details

It is not uncommon for gas prices to skyrocket in Ethereum network this leads to high gas prices, clogging of memepool and slower transactions. The peg for stablecoin relies on timely liquidations to ensure stability. However with high fees, slow network this reduces liquidator incentives putting protocol at risk. It also reduces incentive to participate in the protocol

Impact

Medium: if gas prices are too high, it may not be profitable for liquidators or discourages incentives to transact in order to liquidate. Timely Liquidation is critical to ensure protocol is always overcollaterized and stabilized so that the peg is maintained. Without this the protocol is at risk of usage, timeley liquidations, not being able to maintain peg.

Tools Used

Manual Analysis

Recommendations

It may be prudent to deploy protocol to Layer2 with lower gas fees e.g Polygon
It may be prudent to have a dynamic bonus that may incorporate gas prices to tune it to ensure sufficient incentive
It may be prudent to ensure the contracts are as gas optimized as possible