Core Contracts

Summary

The absence of a minimum borrow amount allow users to borrow extremely small(dust) amounts , which can lead to:
Accumulation of bad debt: because this debt are economical to liquidate.
High gas cost for liquidators, making it financially unviable to clear bad debts.
Denial of Service: As attacker can spam any loan that are never repaid.

Vulnerability Details

• Attacker borrow tiny amount (e.g., 1 Wei per transaction)
  The debt accumulate over time, but since liquidation cost a exceed the debt amount, no one liquidate them
  Debt token balance becomes cluttered with dust position making account inefficient.
  When too many dust load accumulate, liquidators may avoid the protocol entirely leading to a systemic liquidity issue.

Impact

• Accumulation of bad debt

• Higher protocol risk

• DoS

• Increased gas cost

Tools Used

Manual Review

Recommendations

Implement a minimum borrow amount & liquidation floor