No On-Chain Mechanism to Enforce Vault Liquidation and Restrict Deposits Post-Liquidation
Summary
The protocol lacks an on-chain mechanism to mark a vault as liquidated and prevent further deposits. Even after liquidation, users can still deposit funds, leading to incorrect share allocations and potential financial risks.
Vulnerability Details
The protocol does not implement an on-chain mechanism to handle vaults post-liquidation. This means that once a vault is fully liquidated, there are no automated restrictions preventing new user deposits or ensuring proper fund disposal. As a result, users might unknowingly deposit funds into a vault that should be inactive, leading to:
Unfair Share Allocation: If new users deposit into a previously liquidated vault, the share calculation might be inaccurate, potentially benefiting some users unfairly.
Residual Funds Mismanagement: Any leftover funds in the vault could remain indefinitely without clear allocation or retrieval rules, posing risks of fund loss or incorrect distribution.
User Confusion and Misuse: Without clear on-chain enforcement, users may interact with a vault that is no longer supposed to be operational.
Impact
Users can unknowingly deposit into a liquidated vault.
Unfair share distribution due to post-liquidation deposits.
Tools Used
Manual review
Recommendations
Introduce an automated fund disposal mechanism for any remaining assets
Implement an on-chain flag that marks a vault as liquidated and prevents further deposits
Lead Judging Commences
Informational or Gas
Please read the CodeHawks documentation to know which submissions are valid. If you disagree, provide a coded PoC and explain the real likelihood and the detailed impact on the mainnet without any supposition (if, it could, etc) to prove your point.
Prize pool breakdown
Live
The contest is live. Earn rewards by submitting a finding.
Appeals
This is your time to appeal against judgements on your submissions.
Appeals Review
Appeals are being carefully reviewed by our judges.