Summary

The defaultGaugePointFunction in the smart contract does not explicitly handle the scenario where the percentage of the Base Deposited Value (BDV) equals the optimal percentage (optimalPercentDepositedBdv), resulting in an unintended reduction of gauge points to 0 instead of maintaining their current value.

Vulnerability Details

function defaultGaugePointFunction(
uint256 currentGaugePoints,
uint256 optimalPercentDepositedBdv,
uint256 percentOfDepositedBdv
) external pure returns (uint256 newGaugePoints) {
if (
percentOfDepositedBdv >
optimalPercentDepositedBdv.mul(UPPER_THRESHOLD).div(THRESHOLD_PRECISION)
) {
// gauge points cannot go below 0.
if (currentGaugePoints <= ONE_POINT) return 0;
newGaugePoints = currentGaugePoints.sub(ONE_POINT);
} else if (
percentOfDepositedBdv <
optimalPercentDepositedBdv.mul(LOWER_THRESHOLD).div(THRESHOLD_PRECISION)
) {
newGaugePoints = currentGaugePoints.add(ONE_POINT);

        // Cap gaugePoints to MAX_GAUGE_POINTS if it exceeds.
        if (newGaugePoints > MAX_GAUGE_POINTS) return MAX_GAUGE_POINTS;
    }
}

}

Impact

This behavior can lead to an undesired decrease in incentives for contract participants, potentially affecting participation and reward accumulation within the contract's ecosystem. Users may lose gauge points and, consequently, rewards due to a technical flaw rather than their actions.

Tools Used

Recommendations

else {
return currentGaugePoints;
}