Furnace would melt less than intended

[code423n4]

Lines of code

https://github.com/reserve-protocol/protocol/blob/99d9db72e04db29f8e80e50a78b16a0b475d79f3/contracts/p1/Furnace.sol#L92-L105

Vulnerability details

We traded one problem with another here The original issue was that in case melt() fails then the distribution would use the new rate for previous periods as well. The issue now is that in case of a failure (e.g. paused or frozen) we simply don’t melt for the previous period. Meaning RToken holders would get deprived of the melting they’re supposed to get.

This is esp. noticeable when the ratio has been decreased and the balance didn’t grow much, in that case we do more harm than good by updating lastPayout and lastPayoutBal.

A better mitigation might be to update the lastPayout in a way that would reflect the melting that should be distributed.

Assessed type

Other

[tbrent]

I think this can only happen when frozen, not while paused. Furnace.melt() and RToken.melt() succeed while paused.

[c4-sponsor]

tbrent marked the issue as sponsor acknowledged

[c4-judge]

0xean marked the issue as satisfactory

[c4-judge]

0xean marked the issue as selected for report