Inaccurate Position Collateral Sufficiency Check
Summary
The willPositionCollateralBeInsufficient function in VaultReader simplifies collateral sufficiency checks, potentially resulting in inaccurate assessments under certain edge cases, like fluctuating market conditions or extreme price changes.
Vulnerability Details
The collateral sufficiency check only considers changes in position size and collateral, without accounting for dynamic market conditions such as extreme volatility or price shocks. This can lead to incorrect assessments of whether a position has enough collateral, which may allow liquidations to be incorrectly avoided or triggered.
Impact
Inaccurate collateral sufficiency checks may cause unintended liquidations or allow positions to continue operating without sufficient collateral. This could lead to substantial financial losses or missed opportunities for users.
Tools Used
Manual Code Review
Recommendations
Enhance collateral sufficiency checks to include market volatility, leverage, and additional liquidation parameters. Implement more advanced logic that accounts for fluctuations in the price or market conditions.
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