Backed Protocol contest - hickuphh3's results

Lines of code

https://github.com/code-423n4/2022-04-backed/blob/main/contracts/NFTLoanFacilitator.sol#L177

Vulnerability details

Details & Impact

It is possible for the calculated interest rate improvement to be zero if the existing interest rate is low enough (≤ 0.9% with 10% improvement rate). In such cases, lenders can compete to continually buyout each other with the same terms. The borrower will at the very least benefit from having his loan duration reset.

Proof of Concept

Assume a loan of 0.9% interest is specified. Minimum improvement rate is unchanged at 10%.

The minimal rate improvement will be

previousInterestRate * requiredImprovementRate / SCALAR
= 9 * 100 / 1000
= 0

Foundry test:

function testBuyoutSucceedsWithSameTermsForLowInterestRate() public {
  interestRate = 9;
  (, uint256 loanId) = setUpLoanWithLenderForTest(borrower, lender);
  address newLender = address(3);
  setUpLender(newLender);
  vm.startPrank(newLender);

  facilitator.lend(
    loanId,
    interestRate,
    loanAmount,
    loanDuration,
    newLender
  );
}

Recommended Mitigation Steps

A common unit of interest rates is basis points. Increase SCALAR to 10_000. Additionally, have interest rates be specified at intervals of 10 = 0.1%.

require(interestRate % 10 == 0, 'NFTLoanFacilitator: interest rate too granular');