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

`StabilityPool` can't finalize any liquidation

0xgh0st

Summary

After the grace period passes, the stability pool finalizes the process and attempts to send all the liquidated NFTs to its contract. However, the contract cannot actually receive the NFTs because it lacks the onERC721Received function.

Vulnerability Details

As we can see, the lending pool grants permission only to the StabilityPool to liquidate user debt. This privilege allows it to liquidate NFTs of the borrowers, but it fails to account for the fact that the StabilityPool requires a special function (onERC721Received) to receive these tokens.

function finalizeLiquidation(address userAddress) external nonReentrant onlyStabilityPool {
if (!isUnderLiquidation[userAddress]) revert NotUnderLiquidation();
​
// update state
ReserveLibrary.updateReserveState(reserve, rateData);
​
if (block.timestamp <= liquidationStartTime[userAddress] + liquidationGracePeriod) {
revert GracePeriodNotExpired();
}
​
UserData storage user = userData[userAddress];
​
uint256 userDebt = user.scaledDebtBalance.rayMul(reserve.usageIndex);
​
isUnderLiquidation[userAddress] = false;
liquidationStartTime[userAddress] = 0;
// Transfer NFTs to Stability Pool
for (uint256 i = 0; i < user.nftTokenIds.length; i++) {
uint256 tokenId = user.nftTokenIds[i];
user.depositedNFTs[tokenId] = false;
raacNFT.transferFrom(address(this), stabilityPool, tokenId);
}
delete user.nftTokenIds;
​
// 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;
reserve.totalUsage = newTotalSupply;
​
// Update liquidity and interest rates
ReserveLibrary.updateInterestRatesAndLiquidity(reserve, rateData, amountScaled, 0);
​
​
emit LiquidationFinalized(stabilityPool, userAddress, userDebt, getUserCollateralValue(userAddress));
}

Impact

  • The lending pool will accumulate bad debt, which can lead to system instability or corruption.

Tools Used

Manual audit

Recommendations

Add missing function onERC721Received.

Updates

Lead Judging Commences

inallhonesty Lead Judge 7 months ago
Submission Judgement Published
Invalidated
Reason: Incorrect statement

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