Summary

WBTC token can be paused

Vulnerability Details

WBTC token is pausable and if paused the Decentralized StableCoin protocol can not function normally

Impact

Medium: If WBTC is paused then transfers of WBTC are not possible, which impacts ability to deposit, ability to pay back collateral to user, which impacts working of protocol hence the inability for peg to be maintained for the stablecoin
The functions relying on .transfer() and .transferFrom() of WBTC in the contract e.g _redeemCollateral() DSCEngine.sol lines 282-287 will not work. This stops deposits of WBTC, redemptions of WBTC crippling the protocol

Tools Used

Manual Analysis

Recommendations

It is recommended to have safeguards e.g pausable protocol so that in the rare case WBTC is paused, the protocol can also be paused. alternatively replace WBTC with more decentralized collateral asset that is not Pausable