Tadle

Summary

When a seller calls CreateOffer, they provide a collateralRate. However, the protocol does not incentivize adding extra collateral because there is no liquidate function. Providing additional collateral does not offer any benefit and may result in unnecessary losses if issues arise.

Vulnerability Details

The value that the transfer of additional collateral brings to the whole protocol is much lower than the problems it might bring to the protocol, such as calculation errors and potential loss of funds, and it is perfectly reasonable to conclude that all sellers will provide a collateralRate of 1 because anything more does not give them any value or sense of security, but can only lead them to lose more tokens.

Impact

the collateralRate might lead to calculations errors, potential loss of funds and exploits, while giving almost no value to the protocol.

Tools Used

manual review

Recommendations

reconsider the implementation of collateralRate