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moneyversed

medium

Collateral assets with pausing functionality

Summary

Assets that can be paused for transfers can cause loans to become non-liquidatable, as liquidateLoan() would revert.

Vulnerability Detail

In the CollateralEscrowV1.sol contract, collateral assets that have the ability to pause transfers can lead to loans becoming non-liquidatable. When the liquidateLoan() function is called, it may revert if the collateral asset's transfer functionality is paused.

Impact

Code Snippet

https://github.com/sherlock-audit/2023-03-teller/blob/main/teller-protocol-v2/packages/contracts/contracts/escrow/CollateralEscrowV1.sol#L1

Tool used

Manual Review

Recommendation

Implement checks to ensure that the collateral assets used in the protocol do not have pausing functionality or handle paused transfers appropriately. Consider adding a fallback mechanism to manage such cases and protect user assets.