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

Unbounded liquidation size enables protocol destabilization

freesultan

Summary

The StabilityPool contract's liquidateBorrower function lacks caps on liquidation sizes, allowing managers to liquidate arbitrarily large positions which could destabilize the protocol and drain liquidity.

Vulnerability Details

The liquidateBorrower function has no maximum limits on liquidation sizes:

function liquidateBorrower(
address userAddress
) external onlyManagerOrOwner nonReentrant whenNotPaused {
_update();
uint256 userDebt = lendingPool.getUserDebt(userAddress);
uint256 scaledUserDebt = WadRayMath.rayMul(
userDebt,
lendingPool.getNormalizedDebt()
);
// No maximum liquidation size check
// No daily/period volume limits
if (crvUSDBalance < scaledUserDebt) revert InsufficientBalance();
lendingPool.finalizeLiquidation(userAddress);
}

Impact

This could result in:

  1. Protocol Destabilization:

    • Draining of stability pool reserves

    • Market panic from large liquidations

    • Systemic risk to the protocol

  2. Financial Impact:

    • Loss of user funds

    • Depegging of protocol tokens

    • Market manipulation opportunities

Tools Used

Manual code review

Recommendations

Implement liquidation caps and limits

​
contract StabilityPool {
+ uint256 public constant MAX_LIQUIDATION_SIZE = 1_000_000e18;
+ uint256 public constant DAILY_LIQUIDATION_LIMIT = 5_000_000e18;
+ mapping(uint256 => uint256) public dailyLiquidationVolume;
function liquidateBorrower(address userAddress) external onlyManagerOrOwner {
uint256 scaledUserDebt = WadRayMath.rayMul(
userDebt,
lendingPool.getNormalizedDebt()
);
+ require(scaledUserDebt <= MAX_LIQUIDATION_SIZE, "Exceeds max liquidation");
+ uint256 today = block.timestamp / 1 days;
+ uint256 newDailyTotal = dailyLiquidationVolume[today] + scaledUserDebt;
+ require(newDailyTotal <= DAILY_LIQUIDATION_LIMIT, "Exceeds daily limit");
+ dailyLiquidationVolume[today] = newDailyTotal;
// ... rest of liquidation logic
}
}
Updates

Lead Judging Commences

inallhonesty Lead Judge 3 months ago
Submission Judgement Published
Invalidated
Reason: Incorrect statement

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