Part 2

Summary

The createMarketOrder function only checks if the market and settlement are enabled when increasing a position. However, it does not explicitly check whether closing or reducing a position should be restricted when the market or settlement is disabled. This could allow traders to close or reduce positions in a market that should be completely disabled.

Vulnerability Details

• Disable a market using the relevant configuration (perpsEngineConfiguration.chechMarketIsEnabled(params.marketId);).

• Try to close a position by placing a market order with a sizeDelta that reduces the existing position.

• The function will allow the trade bypassing the disabled market restriction because it only checks when ctx.isNotionalValueIncreasing is true

• The position is closed despite the market being disabled, which violates the intended behavior of disabling the market entirely.

Impact

• If a market is disabled users should not be able to trade at all, including closing or reducing their positions.

• Allowing position reductions when a market is disabled could lead to inconsistent system states, unfair advantages for certain traders, and potential arbitrage opportunities.

• If settlement is disabled, closing positions might leave the contract in an unsettled state, leading to funds mismanagement or incorrect balances.

Tools Used

Manual Review

Recommendations

• Modify the logic to explicitly check whether closing a position should also be prevented when the market or settlement is disabed.