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

Users Can Repay Debt Even After Liquidation Grace Period Expires

pelz

Summary

The repay function allows users to repay their debt even when the liquidation grace period has passed and liquidation is pending finalization. This undermines the liquidation process, enabling users to bypass penalties and potentially exploit the system.

Vulnerability Details

Currently, the repay function lacks a check to prevent repayments after liquidation has been initiated and the grace period has expired:

function repay(uint256 amount) external nonReentrant whenNotPaused onlyValidAmount(amount) {
_repay(amount, msg.sender); // @audit-issue can repay debt even when liquidation has been initiated
}

Problematic Scenario

  • When a user becomes eligible for liquidation, a grace period begins.

  • If the user fails to repay during this grace period, liquidation should proceed.

  • Issue: Users can still call repay after the grace period but before finalizeLiquidation is triggered, negating the liquidation process.

Impact

  • Bypassing Liquidation Penalties: Users avoid penalties by repaying after grace period expiration.

  • Economic Exploit: Borrowers can exploit this loophole to maintain risky positions without facing consequences.

  • Integrity Risk: Undermines the protocol’s liquidation process and fairness.

Tools Used

Manual code review.

Recommendations

Add a validation check in the repay function to prevent repayments after the liquidation grace period expires:

if (isUnderLiquidation[msg.sender] && block.timestamp > liquidationStartTime[msg.sender] + liquidationGracePeriod) {
revert LiquidationGracePeriodExpired();
}
Updates

Lead Judging Commences

inallhonesty Lead Judge 4 months ago
Submission Judgement Published
Validated
Assigned finding tags:

A borrower can LendingPool::repay to avoid liquidation but might not be able to call LendingPool::closeLiquidation successfully due to grace period check, loses both funds and collateral

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