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Liquidations can be prevented by updating the SL timeout before it expires

Crit/HighOstium audit·Three Sigma·RWA perpetuals DEX·19th February, 20243S-OS-H01

Description

Traders who continually update their stop losses before the SL timeout expires will never face liquidation.

This is because liquidating via a LimitOrder of type LIQ is impossible when the limit order includes a stop loss. Additionally, triggering the stop loss with a LimitOrder of type SL is hindered by the timeout check.

A PoC can be found here.

Recommendation

If the trade is liquidatable, disregard the timeout for stop losses.

Status

Addressed in #32a1701.

Source

Disclosed by 0xSimao · Sherlock's 2025 Watson of the Year · 21 first places in 57 audit contests