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

Incorrect Scaling in Total Supply Calculation Results in Underestimated Debt

victortheoracle

Summary

The totalSupply function incorrectly scales the stored total supply by dividing it with the normalized debt, rather than multiplying. This error leads to an underestimation of the protocol’s total outstanding debt.

Vulnerability Details

https://github.com/Cyfrin/2025-02-raac/blob/89ccb062e2b175374d40d824263a4c0b601bcb7f/contracts/core/tokens/DebtToken.sol#L232-L235

function totalSupply() public view override(ERC20, IERC20) returns (uint256) {
uint256 scaledSupply = super.totalSupply();
return scaledSupply.rayDiv(ILendingPool(_reservePool).getNormalizedDebt());
}

While the overridden balanceOf method correctly multiplies the raw balance with the normalized debt to represent the actual debt, the totalSupply function instead divides the raw total supply. This inversion in the scaling operation creates a misrepresentation of the overall debt, affecting the protocol's financial metrics.

Impact

  • Inaccurate Metrics: The total outstanding debt is reported lower than it truly is, misleading users and stakeholders.

  • Operational Discrepancies: Inconsistent scaling may cause further issues in interest calculations and liquidity assessments.

Tools Used

  • Manual review

Recommendations

Modify the totalSupply function to multiply the raw total supply with the normalized debt. For example, update the function as shown:

function totalSupply() public view override(ERC20, IERC20) returns (uint256) {
uint256 scaledSupply = super.totalSupply();
// Multiply by the normalized debt instead of dividing
return scaledSupply.rayMul(ILendingPool(_reservePool).getNormalizedDebt());
}

This correction will align the total supply calculation with the balanceOf function and ensure accurate debt representation.

Updates

Lead Judging Commences

inallhonesty Lead Judge 7 months ago
Submission Judgement Published
Validated
Assigned finding tags:

DebtToken::totalSupply incorrectly uses rayDiv instead of rayMul, severely under-reporting total debt and causing lending protocol accounting errors

inallhonesty Lead Judge 7 months ago
Submission Judgement Published
Validated
Assigned finding tags:

DebtToken::totalSupply incorrectly uses rayDiv instead of rayMul, severely under-reporting total debt and causing lending protocol accounting errors

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