Zaros Part 1
Zaros
DeFiFoundry
60,000 USDC
View results
Previous Next
Submission Details
Severity: high
Valid

When liquidating openInterest and skew are set to 0

auditism

Summary

After liquidation skew and open Interest are set to zero.

Vulnerability Details

During the unfortunate event of a liquidation, in each market assets of the liquidatee are emptied. However instead of updating the the skew and open interest, both are set to 0.

perpMarket.updateOpenInterest(ctx.newOpenInterestX18, ctx.newSkewX18);

This happens because ctx.newOpenInterestX18 and ctx.newSkewX18 default to zero.

Impact

The balance of the skew is lost after liquidation, now skew which is an important parameter in the order pricing loses its relevance

Tools Used

Manual review

Recommendations

Consider adding this function in order to calculate both skew and openInterest after liquidations:

function openInterestAndSkewAfterLiquidation(
Data storage self,
SD59x18 sizeDelta,
SD59x18 oldPositionSize,
SD59x18 newPositionSize
)
internal
view
returns (UD60x18 newOpenInterest, SD59x18 newSkew)
{
// load max & current open interest for this perp market uint128 -> UD60x18
UD60x18 maxOpenInterest = ud60x18(self.configuration.maxOpenInterest);
UD60x18 currentOpenInterest = ud60x18(self.openInterest);
newOpenInterest =
currentOpenInterest.sub(oldPositionSize.abs().intoUD60x18()).add(newPositionSize.abs().intoUD60x18());
​
SD59x18 maxSkew = ud60x18(self.configuration.maxSkew).intoSD59x18();
// int128 -> SD59x18
SD59x18 currentSkew = sd59x18(self.skew);
​
// calculate new skew
newSkew = currentSkew.add(sizeDelta);
}
​

And add it to the loop:

​
function liquidateAccounts(uint128[] calldata accountsIds) external {
. . .
tradingAccount.updateActiveMarkets(ctx.marketId, ctx.oldPositionSizeX18, SD59x18_ZERO);
+ (ctx.newOpenInterestX18, ctx.newSkewX18) = checkOpenInterestLimitsAfterLiquidation(ctx.liquidationSizeX18, ctx.oldPositionSizeX18, SD59x18_ZERO)
perpMarket.updateOpenInterest(ctx.newOpenInterestX18, ctx.newSkewX18);
}
Updates

Lead Judging Commences

inallhonesty Lead Judge about 1 year ago
Submission Judgement Published
Validated
Assigned finding tags:

`liquidateAccounts` calls `updateOpenInterest` with uninitialized OI and skew)

Support

FAQs

Can't find an answer? Chat with us on Discord, Twitter or Linkedin.