Submission Details
Severity:
Precision Loss in Liquidity Index Calculation
Issue:
In ReserveLibrary::calculateLiquidityIndex, the final value is downcast to uint128 after rayMul(lastIndex):
function calculateLiquidityIndex(
uint256 rate,
uint256 timeDelta,
uint256 lastIndex
) internal pure returns (uint128) {
uint256 cumulatedInterest = calculateLinearInterest(
rate,
timeDelta,
lastIndex
);
@> return cumulatedInterest.rayMul(lastIndex).toUint128();
}
Remember that calculateLinearInterest returns uint256:
/**
* @notice Calculates the new liquidity index using linear interest.
* @param rate The current liquidity rate (in RAY).
* @param timeDelta The time since the last update (in seconds).
* @param lastIndex The previous liquidity index.
* @return The new liquidity index.
*/
function calculateLinearInterest(
uint256 rate,
uint256 timeDelta,
uint256 lastIndex //* unused param
) internal pure returns (uint256) {
uint256 cumulatedInterest = rate * timeDelta;
cumulatedInterest = cumulatedInterest / SECONDS_PER_YEAR;
return WadRayMath.RAY + cumulatedInterest;
}
Back to calculateLiquidityIndex, since rayMul maintains RAY (1e27) precision, this can cause truncation or overflow if the result exceeds uint128 max (2^128 - 1).
Impact: Potential loss of accrued interest, incorrect liquidity index updates
Recommendation:
Ensure safe downcasting
Prize pool breakdown
Total prize
77,280 USDC
nSLOC
3,86420
USDC / LOC
74,000
3,280
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