Incorrect redeemAmount Is Accounted Due To Not Accounting For The Exchange Rate
Summary
When Liquidating LP , DS and CT are paired , then that amount is used to redeem RA . But the accounting for RA has been done incorrectly since it does not account for exchange rate.
Vulnerability Detail
1.) Inside Liquidate LP we empty out the DS reserve and pair it up with the CT amount returned from the AMM ->
This is the amount of CtDs being redeemed.
2.) This same amount has been accounted for the increment in RA ->
But this is incorrect , this is because redeemAmount is an amount in Ct/Ds not in RA , to make it into RA we need to apply the exchange rate over it(exchange rate is how many Redemption Assets you need to deposit to receive 1 Cover Token + 1 Depeg Swap and how many Redemption Assets you receive when redeeming 1 Pegged Asset + 1 Depeg Swap , read more in the Dealing with non-rebasing Pegged Assets section -> https://corkfi.notion.site/Cork-Protocol-Litepaper-f21a57d5c19d48209dfa0f0c2ab776c4).
3.) Therefore incorrect RA amount has been accounted and incorrect amount of RA would be reserved ->
meaning , incorrect amount of RA attributed to be withdrawn/redeemed.
4.) This inconsistency is found at multiple places , and instead of making separate reports im listing them here ->
The amount here is in RA and we are issuing DS/CT with it.
dsAttributed is in DS and we are depositing RA.
redeemAmount is in Ct/Ds here
Impact
Code Snippet
Tool used
Manual Review
Recommendation
Account for the exchange rate correctly.