Zaros Part 1

Summary

During liquidation, due to a failure to calculate newOpenInterest and newSkew, markets are updated with zero open interest and skew.

Vulnerability Detail

During liquidation, open interest is updated as shown:

However, ctx.newOpenInterestX18 and ctx.newSkewX18 are never calculated. Therefore, the market's open interest and skew is updated with the default value of 0 .

See POC here: https://gist.github.com/giraffe0x/a3ad0ab48b0824b9006667ce355ffa2b

Impact

Critical. After one liquidation, all existing positions of other traders are wiped out preventing further liquidations and all market operations.

Code Snippet

https://github.com/Cyfrin/2024-07-zaros/blob/main/src/perpetuals/branches/LiquidationBranch.sol#L209

Tool used

Manual Review

Recommendation

Call perpMarket.checkOpenInterestLimits to calculate new open interest and skew, before updating the market.