So, a user can borrow total amount of liquidity available in the LenderCommitmentGroup_Smart with the current interest rate which can be very low. Then PoolUtilizationRatio will become very high, but the liquidity providers will recieve interest based on the low interest rate fixed when the loan is made.
Impact
The liquidity providers would receive less interset than expected.
KupiaSec
medium
The interest rate model should be improved in the
LenderCommitmentGroup_Smart
.Summary
The interest rate is fixed when the loan is made.
Vulnerability Detail
The interest rate is determined based on the
PoolUtilizationRatio
when the loan is made.https://github.com/sherlock-audit/2024-04-teller-finance/blob/main/teller-protocol-v2-audit-2024/packages/contracts/contracts/LenderCommitmentForwarder/extensions/LenderCommitmentGroup/LenderCommitmentGroup_Smart.sol#L757-L771
However, the
PoolUtilizationRatio
is determined before incrementingtotalPrincipalTokensLended
.https://github.com/sherlock-audit/2024-04-teller-finance/blob/main/teller-protocol-v2-audit-2024/packages/contracts/contracts/LenderCommitmentForwarder/extensions/LenderCommitmentGroup/LenderCommitmentGroup_Smart.sol#L336-L382
So, a user can borrow total amount of liquidity available in the
LenderCommitmentGroup_Smart
with the current interest rate which can be very low. ThenPoolUtilizationRatio
will become very high, but the liquidity providers will recieve interest based on the low interest rate fixed when the loan is made.Impact
The liquidity providers would receive less interset than expected.
Code Snippet
https://github.com/sherlock-audit/2024-04-teller-finance/blob/main/teller-protocol-v2-audit-2024/packages/contracts/contracts/LenderCommitmentForwarder/extensions/LenderCommitmentGroup/LenderCommitmentGroup_Smart.sol#L757-L771
https://github.com/sherlock-audit/2024-04-teller-finance/blob/main/teller-protocol-v2-audit-2024/packages/contracts/contracts/LenderCommitmentForwarder/extensions/LenderCommitmentGroup/LenderCommitmentGroup_Smart.sol#L336-L382
Tool used
Manual Review
Recommendation
The interest rate model should be improved in the
LenderCommitmentGroup_Smart
.Duplicate of #72