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ManagedLeveragedVault::increaseLeverage() will never work in Recovery mode

Low/InfoBeraborrow Managed Dens·Sherlock · CDP stablecoin · 25th April, 2025L-4

Summary

Recovery mode doesn't allow Dens to decrease their ICR. Hence, ManagedLeveragedVault::increaseLeverage() will revert when the protocol is in Recovery mode.

Vulnerability Detail

ManagedLeveragedVault::increaseLeverage() withdraws debt:

solidity
b$.borrowerOperations.withdrawDebt(
    b$.denManager,
    address(this),
    _maxFeePercentage,
    _debtAmount,
    _upperHint,
    _lowerHint
);

But this is not possible in Recovery mode, as it requires that the new ICR is bigger than the old one.

Impact

DoSed increasing leverage.

Code Snippet

https://github.com/sherlock-audit/2025-04-beraborrow-vault-update/pull/1/files#diff-2d972f52027e0ba1065b2de2b424416244bfef9e2a79d2604e1687867f72c91eR431-R438

Tool Used

Manual Review

Recommendation

Nothing can be really done but it's something to keep in mind.