Summary

MarginCallSecondaryFacet doesn't provide any bonus for liquidators. Because of that in case if there will be no orders in order book, then it will be not possible to make liquidation.

Vulnerability Details

DittoEth protocol has 2 way of liquidation. In first way which is done through the MarginCallPrimaryFacet, shorters are liquidated through the order book, which means that in order to liquidation be done, order book should have enough of asks/shorts to cover position. In case if it's not the case, then MarginCallPrimaryFacet can't be used for liquidation.

Another option is to do liquidation through MarginCallSecondaryFacet. Here, user can provide own asset instead of shorter and receive collateral. The problem is that in such liquidation, liquidator doesn't receive any bonus, which means that he can be not incentivized to do that.

This creates a risk for protocol that in case if there are no asks/shorts on order book that match liquidation price, then liquidation through MarginCallSecondaryFacet will not be done as well, because liquidators are not interested in such swap.

Impact

Liquidation may not occur when it's needed, which leads to bad debt in the system.

Tools Used

VsCode

Recommendations

Give some bonus amount to the liquidator.