Summary

In the contract MErc20DelegateFixer.sol , the function fixUser() which allows admin/governor to fix a user via transfering all it tokens to liquidator and repay its bad debt . Note , admin will call this function only when admin realises that the user have enough tokens , which would be able to repay the principle amount of debt . Once admin calls this function , any mallicious user will wait this call to happen and front run it with transfering all its token somewhere else and left by with minimal or 1 token , since there is no check which ensures accountTokens[user] >= principal , The mallicious user will able to repay all its debt with almost no amount of token .

Vulnerability Details

In the function below

Suppose Alice is a Mallicious user with bad debt such that,
principal = borrowBalanceStored(Alice) = 1000
&
accountTokens[Alice] = 1200

Admin realises that the bad debt of Alice can be paid since he hold more token then debt , so admin calls fixUser(liquidator, Alice)
Since Allice is a Mallicious user, it will wait for admin to call fixUser(liquidator,Alice) , once user calls this function , Alice will front run this call
by transferring most of its token lets say 1199 to a different account or somewhere else ,
such that remaining accountTokens[Alice] = 1 ;

thus liquidated = 1;

since liquidated !=0 , The function passes through with
accountBorrows[Alice].principal = 0;

Impact

High

Tools Used

Manual Review

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