users cannot be liquidated when `PauseType.Liquidation` is set to true

[hats-bug-reporter[bot]]

Github username: @Audinarey Twitter username: audinarey Submission hash (on-chain): 0x8f197744e0eca8348e4d96f04a891580ddebd01a1f43e3293f9fdafa8f0f2802 Severity: high

Description: Description\ The BBLiquidation::liquidate(...) and SGLBorrow::Liquidate(...) are functions that users call to liqudate positions that are currently greater than or equal to the collateralizationRate which is set in the sysytem as 80%. However these functions are protected by a optionNotPaused(...) modifier with a PauseType.Liquidation argument which ensures the functions cannot be called whenever PauseType.Liquidation= true

File: SGLLiquidation.sol

120:     function liquidate(
121:         address[] calldata users,
122:         uint256[] calldata maxBorrowParts,
123:         uint256[] calldata minLiquidationBonuses,
124:         IMarketLiquidatorReceiver[] calldata liquidatorReceivers,
125:         bytes[] calldata liquidatorReceiverDatas
126:  @>  ) external optionNotPaused(PauseType.Liquidation) {
127:         if (users.length == 0) revert NothingToLiquidate();
SNIP
...;
137: 
138:         _closedLiquidation(
139:             users, maxBorrowParts, minLiquidationBonuses, liquidatorReceivers, liquidatorReceiverDatas, exchangeRate
140:         );
141:     }
142. 

File: BBLiquidation.sol

119:     function liquidate(
120:         address[] calldata users,
121:         uint256[] calldata maxBorrowParts,
122:         uint256[] calldata minLiquidationBonuses,
123:         IMarketLiquidatorReceiver[] calldata liquidatorReceivers,
124:         bytes[] calldata liquidatorReceiverDatas
125:  @>  ) external optionNotPaused(PauseType.Liquidation) {
126:         if (users.length == 0) revert NothingToLiquidate();
SNIP
......
137: 
138:         _closedLiquidation(
139:             users, maxBorrowParts, minLiquidationBonuses, liquidatorReceivers, liquidatorReceiverDatas, exchangeRate
140:         );
141:     }

Attack Scenario\

• The liquidationCollateralizationRate is 80%
• however due to market conditions the value of Bobs collateral decreases bringing his position to a collateralizationRate of 81%.
• PauseType.Repayis currently set to true.
• Alice calls BBLiquidation::liquidate(...) to liquidate BOB but the function reverts due to in the optionNotPaused(...) modifier
• Bob's position is currently at a collateralizationRate of 81%,
• Market conditions continue to deterioriate and Bobs collateral value keeps going further down plumeting Bobs collateralizationRate.
• Bob is not the only user eligible for liquidation and as such this could drive the protocol into insolvency considering that it is now impossible to liquidate other positions that are below the liquidationCollateralizationRate of the protocol.

Attachments

Revised Code File (Optional)

Modify the BBLiquidation::liquidate(...) and SGLBorrow::Liquidate(...)functions to ensure users are able to repay their loans as shown below

File: SGLLiquidation.sol

120:     function liquidate(
121:         address[] calldata users,
122:         uint256[] calldata maxBorrowParts,
123:         uint256[] calldata minLiquidationBonuses,
124:         IMarketLiquidatorReceiver[] calldata liquidatorReceivers,
125:         bytes[] calldata liquidatorReceiverDatas

126:    -    ) external optionNotPaused(PauseType.Liquidation) {

126:    +   ) external  {

127:         if (users.length == 0) revert NothingToLiquidate();
SNIP
...;
137: 
138:         _closedLiquidation(
139:             users, maxBorrowParts, minLiquidationBonuses, liquidatorReceivers, liquidatorReceiverDatas, exchangeRate
140:         );
141:     }
142. 

File: BBLiquidation.sol

119:     function liquidate(
120:         address[] calldata users,
121:         uint256[] calldata maxBorrowParts,
122:         uint256[] calldata minLiquidationBonuses,
123:         IMarketLiquidatorReceiver[] calldata liquidatorReceivers,
124:         bytes[] calldata liquidatorReceiverDatas

125:    -    ) external optionNotPaused(PauseType.Liquidation) {

125:    +   ) external  {

126:         if (users.length == 0) revert NothingToLiquidate();
SNIP
......
137: 
138:         _closedLiquidation(
139:             users, maxBorrowParts, minLiquidationBonuses, liquidatorReceivers, liquidatorReceiverDatas, exchangeRate
140:         );
141:     }