Emission Rate Remains Unchanged at Utilization Target
Summary
In the calculateNewEmissionRate function, if utilizationRate == utilizationTarget, the emission rate remains unchanged. This may lead to unintended economic effects in the protocol.
Vulnerability Details
The function calculateNewEmissionRate determines the emission rate based on the utilization rate. However, when utilizationRate exactly matches utilizationTarget, the emission rate does not change. This could result in the protocol failing to dynamically adjust incentives in response to changing market conditions.
Impact
A lack of periodic adjustments could lead to the emission schedule not aligning with the intended economic model of the protocol.
If the emission rate remains the same for extended periods, liquidity providers and borrowers may not receive optimal incentives, potentially reducing participation in the protocol.
Tools Used
Manual review
Recommendations
Consider implementing a time-based or gradual adjustment mechanism to avoid stagnation
Lead Judging Commences
RAACMinter::calculateNewEmissionRate doesn't handle utilizationRate == utilizationTarget case, causing emission rates to remain incorrectly adjusted
RAACMinter::calculateNewEmissionRate doesn't handle utilizationRate == utilizationTarget case, causing emission rates to remain incorrectly adjusted
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