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

Burning wrong amount of tokens in DebtContract

revcrew777

Summary

In DebtToken contract in burn function there is inaccuracy on calculating burning amount of the tokens.
It was missed to add the interest value to amount.
In LendingPool contract sending wrong amount of burned tokens.

Vulnerability Details

At first glance the self assignment of the variable is not correct. In DebtToken contract in burn() function at row 197:

amount = amount;

It was missed to add the interest value to amount.

Receiving wrong amount of tokens at row 525 in LendingPool Contract

// Burn DebtTokens from the user
(uint256 amountScaled, uint256 newTotalSupply, uint256 amountBurned, uint256 balanceIncrease) = IDebtToken(reserve.reserveDebtTokenAddress).burn(userAddress, userDebt, reserve.usageIndex);
​
// Transfer reserve assets from Stability Pool to cover the debt
IERC20(reserve.reserveAssetAddress).safeTransferFrom(msg.sender, reserve.reserveRTokenAddress, amountScaled);

Impact

The problem will cause wrong calculating of the amount. The variable amountScaled at row 206 in DebtToken contract will be received without interest value.

function finalizeLiquidation(address userAddress) external nonReentrant onlyStabilityPool {f
// Burn DebtTokens from the user
(uint256 amountScaled, uint256 newTotalSupply, uint256 amountBurned, uint256 balanceIncrease) = IDebtToken(reserve.reserveDebtTokenAddress).burn(userAddress, userDebt, reserve.usageIndex);
​
// Transfer reserve assets from Stability Pool to cover the debt
IERC20(reserve.reserveAssetAddress).safeTransferFrom(msg.sender, reserve.reserveRTokenAddress, amountScaled);
​
// Update user's scaled debt balance
user.scaledDebtBalance -= amountBurned;
}
​
function _repay(uint256 amount, address onBehalfOf) internal {
// Burn DebtTokens from the user whose debt is being repaid (onBehalfOf)
// is not actualRepayAmount because we want to allow paying extra dust and we will then cap there
(uint256 amountScaled, uint256 newTotalSupply, uint256 amountBurned, uint256 balanceIncrease) =
IDebtToken(reserve.reserveDebtTokenAddress).burn(onBehalfOf, amount, reserve.usageIndex);
// Transfer reserve assets from the caller (msg.sender) to the reserve
IERC20(reserve.reserveAssetAddress).safeTransferFrom(msg.sender, reserve.reserveRTokenAddress, amountScaled);
}

It will be transfered wrong amount of tokens.

Recommendations

For the problem to fix that you should use:

amount = amount + balanceIncrease;
Updates

Lead Judging Commences

inallhonesty Lead Judge 4 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 4 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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