Ethereum Credit Guild - EVDoc's results

Lines of code

https://github.com/code-423n4/2023-12-ethereumcreditguild/blob/2376d9af792584e3d15ec9c32578daa33bb56b43/src/loan/LendingTerm.sol#L805-L808

Vulnerability details

Impact

Calling onBid() could reverts due to the borrower being blacklisted, it will lead to a bad debt at the conclusion of the auction. The only way to address this situation will be to call the forgive() function

Proof of Concept

If the collateral is USDC or USDT and a borrower is blacklisted after taking a loan, a revert will occur when calling bid() because onBid() will fail to transfer the remaining collateral back to the borrower. This scenario may unfold only if someone places a bid during the first phase of the auction, provided that collateralToBorrower != 0:

This transfer will revert if the borrower is blacklisted: https://github.com/code-423n4/2023-12-ethereumcreditguild/blob/2376d9af792584e3d15ec9c32578daa33bb56b43/src/loan/LendingTerm.sol#L804-L808

Tools Used

Manual review

Recommended Mitigation Steps

Instead of sending tokens directly to the borrower, consider storing the number of tokens in variables and having the borrower claim it later in order to avoid any revert during the bidding process.

Assessed type

DoS