jennifer37 - Incorrect settleFee process for cross-margin account

[sherlock-admin2]

jennifer37

Medium

Incorrect settleFee process for cross-margin account

Summary

Settle fee is processed twice when the closed/decreased position is cross-margin position.

Vulnerability Detail

When the traders want to close or decrease their cross-margin positions, settle fees are generated. Settle fees include borrow fee, funding fee, and close fee. When the settle fee is positive, the traders need to pay for the settle fee, otherwise, the traders will receive settle fees. The vulnerability exists in function _settleCrossAccount. In this function, we will update the trader's cross-margin account via subTokenWithLiability or addToken at the first time. After that, if Pnl is larger than 0, settle fee will be process again, which is in wrong direction.

For example, if the settle fee is 10. The function will decrease this settle fees from cross-margin account via subTokenWithLiability, and then increase this settle fees to the cross-margin account via addToken. This means that the traders don't need to pay for the settle fee. Of course, the traders cannot gain the settle fee profit if the settle fee is negative.

What's more, considering that when cache.recordPnlToken is positive and cache.settledFee is negative, and the sum of cache.recordPnlToken and cache.settledFee is negative, this could cause reverted because (cache.recordPnlToken + cache.settledFee).toUint256() cast failure.

    function _settleCrossAccount(
        uint256 requestId,
        Account.Props storage accountProps,
        Position.Props storage position,
        DecreasePositionCache memory cache
    ) internal returns (uint256 addLiability) {
@==> process settle fee at the first time
        if (cache.settledFee > 0) {
            accountProps.subTokenWithLiability(
                cache.position.marginToken,
                cache.settledFee.toUint256(),
                Account.UpdateSource.SETTLE_FEE
            );
        } else {
            //Add some settled fee in cross-margin account
            accountProps.addToken(
                cache.position.marginToken,
                (-cache.settledFee).toUint256(),
                Account.UpdateSource.SETTLE_FEE
            );
        }
        // decrease used_amount
        accountProps.unUseToken(
            cache.position.marginToken,
            cache.decreaseMargin,
            Account.UpdateSource.DECREASE_POSITION
        );
        address portfolioVault = IVault(address(this)).getPortfolioVaultAddress();
        // trader wins in cross-margin mode
        if (cache.recordPnlToken >= 0) {
       @==> process the settle fee again.
            accountProps.addToken(
                cache.position.marginToken,
                (cache.recordPnlToken + cache.settledFee).toUint256(),
                Account.UpdateSource.SETTLE_PNL
            );

Impact

• Settle fees are not processed correctly, traders may pay less fee than they should, may gain less fee than they deserve.
• Decrease order may be reverted when cache.recordPnlToken + cache.settledFee is negative.

Code Snippet

https://github.com/sherlock-audit/2024-05-elfi-protocol/blob/main/elfi-perp-contracts/contracts/process/DecreasePositionProcess.sol#L338-L368

Tool used

Manual Review

Recommendation

Don't process the settle fee twice.

[nevillehuang]

request poc

[sherlock-admin4]

PoC requested from @johnson37

Requests remaining: 12

[0xELFi]

There is a problem here： when cache.recordPnlToken + cache.settledFee is negative.

[sherlock-admin2]

The protocol team fixed this issue in the following PRs/commits: https://github.com/0xCedar/elfi-perp-contracts/pull/31

[sherlock-admin2]

The Lead Senior Watson signed off on the fix.