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code-423n4 / 2024-03-saltyio-mitigation-findings

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M-05 MitigationConfirmed #51

Open c4-bot-3 opened 4 months ago

c4-bot-3 commented 4 months ago

Lines of code

Vulnerability details

Lines of code

Vulnerability details

C4 Issue

https://github.com/code-423n4/2024-01-salty-findings/issues/905

Comments

The issue highlighted that during rapid downturns, if collateral asset prices decline more quickly than the liquidation process can address, the protocol may find its collateral value falling below the total circulating USDS. This undercollateralization risks the USDS depegging from the dollar, potentially leading to financial losses for USDS holders. the recommended fix for this was to create a system that creates an incentive for users to sell their assets and acquire USDS on external market.

Mitigation

https://github.com/othernet-global/salty-io/commit/8e3231d3f444e9851881d642d6dd03021fade5ed

The mitigation for this issue revolved around the deprecation of number of key components including the overcollateralized USDS stablecoin framework, which also meant borrowing of USDS no longer exists, ergo issues concerning undercollateralization and liquidations are no longer possible.

Conclusion

LGTM

c4-judge commented 4 months ago

Picodes marked the issue as satisfactory

c4-judge commented 4 months ago

Picodes marked the issue as confirmed for report