Core Contracts
Regnum Aurum Acquisition Corp
HardhatReal World AssetsNFT
77,280 USDC
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Submission Details
Severity: medium
Invalid

When `LendingPool` is paused, the user who were put to liquidation cannot repay and will be liquidated if the unpausing happens when their grace period ends

CODESPECT

Summary

In LendingPool, when a user becomes under liquidation, he has a certain grace period to repay his debt before his liquidation gets finalized. However, if the contract is paused, the user can't repay his debt and the grace period is passing. During LendingPool pauses, all under liquidation users can lose their grace period to repay their debt and instantly become liquidated when the contract gets unpaused.

Vulnerability Details

The liquidation process in LendingPool has 3 steps:

  1. initiateLiquidation puts an address with a bad health factor under liquidation. This address now has liquidationGracePeriod time to repay his debt.

  2. Grace period time is when the address can repay the debt and call closeLiquidation which will remove the address from being under liquidation.

  3. If grace period has passed, finalizeLiquidation can be called to complete the process.

However, if the protocol is paused, the user can neither call repay or closeLiquidation as they are protected by the whenNotPaused modifier:

@> function repay(uint256 amount) external nonReentrant whenNotPaused onlyValidAmount(amount) {
_repay(amount, msg.sender);
}
​
function repayOnBehalf(uint256 amount, address onBehalfOf)
external
nonReentrant
@> whenNotPaused
onlyValidAmount(amount)
{
if (!canPaybackDebt) revert PaybackDebtDisabled();
if (onBehalfOf == address(0)) revert AddressCannotBeZero();
_repay(amount, onBehalfOf);
}
​
@> function closeLiquidation() external nonReentrant whenNotPaused {
address userAddress = msg.sender;
​
if (!isUnderLiquidation[userAddress]) revert NotUnderLiquidation();
​
// update state
ReserveLibrary.updateReserveState(reserve, rateData);
​
if (block.timestamp > liquidationStartTime[userAddress] + liquidationGracePeriod) {
revert GracePeriodExpired();
}
.
.

Impact

When the protocol gets paused, all under liquidation addresses are unable to repay and closeLiquidation. However, the grace period keeps passing which means that when the protocol gets unpaused many users will be able to have their liquidations finalized without the opportunity of closing them, as they are supposed to.

Tools Used

Manual review

Recommendations

Possibly rethink the liquidation process and not allow a grace period for any user. Another solution is to internally keep track of the time the protocol gets paused and extend the current liquidations by that time.

Updates

Lead Judging Commences

inallhonesty Lead Judge 6 months ago
Submission Judgement Published
Invalidated
Reason: Design choice

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