The Standard

Summary

The protocol heavily relies on Chainlink price feeds to work correctly and in case of failure the protocol will be disrupted.

Vulnerability Details

If pausing (Chainlink Automation pauses contracts in case of unexpected scenarios happening) or some fail happens or Chainlink reverts, then LiquidationPool::distributeAssets will fail which means no rewards can be distributed and the contract becomes useless, but what is worse is that no vault can get liquidated since we are getting the collateral token in euro to determine if the vault is undercollateralized.

Impact

Without fallback solutions, the protocol will be unable to operate if Chainlink's aggregators fail to update price data.

Consider the scenario that Chainlink's aggregators fail to update price data and collateral tokens' prices dramatically go down, liquidating a vault will be impossible. Consequently, the protocol will become insolvent eventually, leading to the protocol's disruption.

Tools Used

Manual Review

Recommendations

I recommend implementing fallback solutions, such as using other off-chain oracle providers and/or on-chain Uniswap's TWAP, for feeding price data in case Chainlink's aggregators fail.