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

Incorrect Health Factor Scaling Triggers False Liquidations

kobbyeugene

Summary

The calculateHealthFactor function uses 1e18 scaling instead of RAY (1e27), miscalculating health factors and causing unwarranted liquidations.

Vulnerability Details

The health factor formula uses 1e18 for scaling, but the protocol uses RAY (1e27) for precision. This underreports health factors by 1e9, leading to premature liquidations.

/**
* @notice Calculates the user's health factor
* @param userAddress The address of the user
* @return The health factor (in RAY)
*/
function calculateHealthFactor(address userAddress) public view returns (uint256) {
uint256 collateralValue = getUserCollateralValue(userAddress);
uint256 userDebt = getUserDebt(userAddress);
​
if (userDebt < 1) return type(uint256).max;
​
uint256 collateralThreshold = collateralValue.percentMul(liquidationThreshold);
​
// @audit should be using 1e27 instead of 1e18 this can cause false liquidation
return (collateralThreshold * 1e18) / userDebt;
}

Impact

  • False Liquidations: Users with sufficient collateral are liquidated.

  • Loss of Funds: Liquidated users lose NFTs at undervalued prices.

Tools Used

manual review

Recommendations

Use WadRayMath.RAY (1e27) for scaling:

return collateralThreshold.rayDiv(userDebt);
Updates

Lead Judging Commences

inallhonesty Lead Judge 4 months ago
Submission Judgement Published
Invalidated
Reason: Incorrect statement
inallhonesty Lead Judge 4 months ago
Submission Judgement Published
Invalidated
Reason: Incorrect statement

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