DittoETH

Summary

Some functions like MarketShutdownFacet.sol shutdownMarket(address asset) that act like important guards and need to be called by anyone when critical thresholds are reached lack incentives for anyone to call them

Vulnerability Details

MarketShutdownFacet.sol shutdownMarket(address asset) is a critical function that relies on anyone calling it when c-ratio threshold is reached in order to freeze a market permanently. However, the function relies on anyone calling it, it does not reward the caller in any way. There is no incentive for anyone to call it, especially shorters who may lose access to their positions.

Another function is MarginCallSecondaryFacet.sol liquidateSecondary it does not give any fees or benefits to caller. Documentation states

If there is sufficient liquidity to convert pegged asset to zETH there is no incentive for anyone to carry out secondary liquidations

Impact

This critical function to freeze market permanently may never be called leading to unbalanced open market with c-ratios that have crossed critical thresholds

Tools Used

Manual Analysis

Recommendations

It is recommended to give fees or portion of extras that go to TAPP to the function caller to incentivize anyone to call the function when c-ratio thresholds reached, else no one will activate a market shutdown.