Liquidity Management

Vulnerability Details

When a position is fully liquidated on GMX, the contract updates curPositionKey to 0 in PerpetualVault::afterLiquidationExecution() but fails to properly flag the position as closed. This state inconsistency creates a situation where the contract continues to treat the position as active on GMX when it has actually been liquidated.

Impact

The root cause lies in the callback handling logic where the position closure state is not properly synchronized with GMX's liquidation events. This leads to two significant issues:

1. Users are forced to pay unnecessary execution fees during withdrawals because the contract believes there is an active GMX position

2. They also pay an execution fee for a deposit transaction that could have been executed almost immediately without needing to involve GMX.

Proof of Concept

1. The position gets liquidated on GMX, triggering the callback function

2. The callback sets curPositionKey to 0 but doesn't update the position's closed status

3. A user attempts to deposit/withdraw funds.

4. The contract incorrectly determines that there is an active GMX position

5. The user is charged an execution fee.

Recommendation

The position state should be properly updated when handling GMX liquidation callbacks. Implement a comprehensive state management system that correctly tracks and updates the positionIsClosed status.