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

Discrepancy in the burn() function in DebtToken

oxaudron

Summary

As per the docs/natspec :

This contract aligns with Aave's VariableDebtToken implementation, scaling balances by the usage index.

So basically there is an index - _usageIndex which is always used with the supplied amount for the scaling purpose. So the mint and burn are expected to have the amount + balanceIncrease which is calculated based on delta index. It is implemented in the mint function however, it seems like in the burn the developers forgot to add the balanceIncrease for the burn function.

Vulnerability Details

mint() function code :

if (_userState[onBehalfOf].index != 0 && _userState[onBehalfOf].index < index) {
balanceIncrease = scaledBalance.rayMul(index) - scaledBalance.rayMul(_userState[onBehalfOf].index);
}
​
_userState[onBehalfOf].index = index.toUint128(); //state change
​
uint256 amountToMint = amount + balanceIncrease;
​
_mint(onBehalfOf, amountToMint.toUint128()); //state change

burn() function code :

​
if (_userState[from].index != 0 && _userState[from].index < index) {
uint256 borrowIndex = ILendingPool(_reservePool).getNormalizedDebt();
balanceIncrease = userBalance.rayMul(borrowIndex) - userBalance.rayMul(_userState[from].index);
amount = amount; //@audit High amount not added with balanceIncrease!
}
​

Impact

  • Burn less tokens than intended

Tools Used

Manual review

Recommendations

  • Add this to burn function code :

​
if (_userState[from].index != 0 && _userState[from].index < index) {
uint256 borrowIndex = ILendingPool(_reservePool).getNormalizedDebt();
balanceIncrease = userBalance.rayMul(borrowIndex) - userBalance.rayMul(_userState[from].index);
- amount = amount; //@audit High amount not added with balanceIncrease!
+ amount += balanceIncrease;
}
​
Updates

Lead Judging Commences

inallhonesty Lead Judge about 2 months ago
Submission Judgement Published
Invalidated
Reason: Incorrect statement
Assigned finding tags:

DebtToken::burn calculates balanceIncrease (interest) but never applies it, allowing borrowers to repay loans without paying accrued interest

Interest IS applied through the balanceOf() mechanism. The separate balanceIncrease calculation is redundant/wrong. Users pay full debt including interest via userBalance capping.

inallhonesty Lead Judge about 2 months ago
Submission Judgement Published
Invalidated
Reason: Incorrect statement
Assigned finding tags:

DebtToken::burn calculates balanceIncrease (interest) but never applies it, allowing borrowers to repay loans without paying accrued interest

Interest IS applied through the balanceOf() mechanism. The separate balanceIncrease calculation is redundant/wrong. Users pay full debt including interest via userBalance capping.

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