The Standard

Summary

The protocol heavily relies on the accuracy of the Chainlink price oracles in the asset distribution section of LiquidationPool.sol. Chainlink’s documentation recommends checking the if L2 sequencer to mitigate the usage of stale prices.

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.

As a result, users may be able to use the protocol while oracle feeds are stale. This will cause problems because malicious users will check the result of LiquidationPool::distributeAssets function and call it when the difference in price (stale L2 vs actual L1) heavily favors them getting more rewards.

Impact

If the sequencer goes down, the protocol will allow users to continue to operate at the previous (stale) rates and this can be leveraged by malicious actors to gain unfair advantage.

Tools Used

Manual review

Recommendations

Check sequencer uptime before consuming any price data.

The way this check is performed can be found here.