The Standard

Summary

Chainlink recommends that all Optimistic L2 oracles consult the Sequencer Uptime Feed to ensure that the sequencer is live before trusting the data returned by the oracle. This vulnerability could potentially be exploited by malicious actors to gain an unfair advantage.

Vulnerability Details

If the Arbitrum Sequencer goes down, oracle data will not be kept up to date, and thus could become stale. However, users are able to continue to interact with the protocol directly through the L1 optimistic rollup contract. You can review Chainlink docs on L2 Sequencer Uptime Feeds for more details on this.

As a result, users may be able to use the protocol while oracle feeds are stale. This could cause many problems, but as a simple example:

• A user has an vault with 10 ETH, valued at 1000€ each

• The Arbitrum sequencer goes down temporarily

• While it's down, the price of ETH falls to 800€

• The current value of the user's vault is 8,000€, so they should be able to borrow a maximum of 7272.8 EUROs to keep account healthy (8000 * 90.91 / 100)

• Because of the stale price, the protocol lets them borrow 9091 EUROs (10000 * 90.91 / 100)

Impact

If the Arbitrum sequencer goes down, the protocol will allow users to continue to operate at the previous (stale) rates.

Tools Used

Manual review

Recommendations

The Chainlink documentation contains an example for how to check the sequencer status: https://docs.chain.link/data-feeds/l2-sequencer-feeds