Lack of incentives to buy Zeno bonds
Summary
Zeno bonds intend to mimic Frax bonds, i.e., buying future USDC at a discounted rate. However the price of these bonds in the auction is not using decimals, that means the lowest price at which a user can acquire a unit of the bond is at $1USD, this generates a 0% yield in the operation, if we also consider in our calculations a positive risk free rate, the yield would be negative, therefore users lack of economic incentives to buy the bond.
Vulnerability Details
Impact
Tools Used
Manual review.
Recommendations
Define a decimal range for the bond price and scale the amount when determining the cost of buying a certain amount of units of the bond in the auction.
Lead Judging Commences
Auction.sol's buy() function multiplies ZENO amount (18 decimals) by price (6 decimals) without normalization, causing users to pay 1 trillion times the intended USDC amount
Prize pool breakdown
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