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

Interest accruals don't happen in `DebtToken::burn`

pyro

Summary

Interest accruals don't happen in DebtToken::burn

Vulnerability Details

From the code bellow it is clearly seen that we don't increase the user balance by balanceIncrease. This means that the newly generated interest will not be added to his account, meaning that he won't be charged as much.

uint256 balanceIncrease = 0;
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;
}
​
_userState[from].index = index.toUint128();
​
if(amount > userBalance){
amount = userBalance;
}
​
uint256 amountScaled = amount.rayDiv(index);
​
if (amountScaled == 0) revert InvalidAmount();
​
_burn(from, amount.toUint128());

Impact

Burning does not add interest, aka. balanceIncrease, which would decrease yield and total.
Borrowers don't pay the yield if they borrow and then repay, no matter the time difference between the 2.

Tools Used

Manual review.

Recommendations

Add balanceIncrease to the user balance to apply the newly accrued interest.

Updates

Lead Judging Commences

inallhonesty Lead Judge 7 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 7 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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