Ethereum Credit Guild - Beepidibop's results

Lines of code

https://github.com/code-423n4/2023-12-ethereumcreditguild/blob/main/src/loan/LendingTerm.sol#L652-L656 https://github.com/code-423n4/2023-12-ethereumcreditguild/blob/main/src/loan/LendingTerm.sol#L237 https://github.com/code-423n4/2023-12-ethereumcreditguild/blob/main/src/loan/AuctionHouse.sol#L84-L87 https://github.com/code-423n4/2023-12-ethereumcreditguild/blob/main/src/loan/LendingTerm.sol#L738

Vulnerability details

[H-1] LendingTerm: Cannot Liquidate Loans that Are Underwater

_call(), which starts the auction for each loanId, doesn't allow liquidating an underwater position.

A position can max borrow and go over its borrow limit within 1 block, but _call() won't be able to liquidate the position since the gauge isn't deprecated and partialRepayDelayPassed() doesn't return false, which will make the tx revert. It also doesn't check if debt is actually within maxBorrow before this revert.

Other scenarios can happen which make positions underwater, such as when a liquidation happens and decreases creditMultiplier, which increases all borrowers' principal.

The governance also can't liquidate the loanId by using emergencyAction(). Since AuctionHouse.startAuction() requires loan.callTime == block.timestamp and onBid() requires the loan to not be closed with loans[loanId].closeTime == 0, governance actions such as forgive() won't be able to start an auction either.

Recommendation

Calculate interest and check if interest+principal>maxBorrow before require( isDeprecatedGuage() || partialrepayDelayPassed() )

Link To Affected Code

https://github.com/code-423n4/2023-12-ethereumcreditguild/blob/main/src/loan/LendingTerm.sol#L652-L656 https://github.com/code-423n4/2023-12-ethereumcreditguild/blob/main/src/loan/LendingTerm.sol#L237 https://github.com/code-423n4/2023-12-ethereumcreditguild/blob/main/src/loan/AuctionHouse.sol#L84-L87 https://github.com/code-423n4/2023-12-ethereumcreditguild/blob/main/src/loan/LendingTerm.sol#L738

Assessed type

Invalid Validation