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shaka

high

WBGL/ETH pool liquidity is too low

Summary

WBGL/ETH pool liquidity is too low.

Vulnerability Detail

At the moment of the writing the Uniswap V3 pool fof WBGL/ETH has only $11,060 of liquidity. This makes the use of this pool as a price oracle discouraged, as it can be easily manipulated, even if the TWAP is used.

Impact

The price of WBGL can be manipulated having the following consequences:

  • When using WBGL to mint USSD, an incorrect amount will be minted.
  • The rebalance functionality will not work as expected, as the amounts to be swapped in USSDRebalancer.sol:SellUSSDBuyCollateral() and USSDRebalancer.sol:BuyUSSDSellCollateral() will be incorrect.

Code Snippet

https://github.com/sherlock-audit/2023-05-USSD/blob/main/ussd-contracts/contracts/oracles/StableOracleWBGL.sol#L26

Tool used

Manual review

Recommendation

Avoid using tokens with low liquidity as collateral.