DittoETH

Summary

The price fetched from the TWAP Oracle is considered valid without checking the pool's liquidity when Chainlink's data is invalid. This allows the TWAP Oracle to return an invalid price which can be used for different protocol activities.

Vulnerability Details

The TWAP Oracle acts as a fallback when the data fetched from Chainlink is invalid. TWAP oracles with low liquidity are susceptible to manipulation, hence the need to check the pool's liquidity to ensure the price is valid. When Chainlink's data is considered invalid the price from the TWAP oracle is returned without considering the liquidity of the pool.

Impact

Invalid prices can be returned from the TWAP oracle which will be used in performing activities like creating shorts, asks and bids, giving an unfair advantage to an attacker.

Tools Used

Vscode

Recommendations

Check the liquidity of the TWAP Oracle's pool before returning its price when Chainlink's data is invalid.