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Assessment reports>Perennial>Discussion>Undercollateralized positions possible
GeneralOverview
Findings
Critical (1)
High (1)
Medium (1)
Low (2)
DiscussionUnnecessary storage assignments in `MappingStorageLib` waste gasIncorrect documentation in Vault `Mapping`Market user interface may be misleadingMissing fee claim mechanismUndercollateralized positions possible
Threat ModelWhat are threat models?Market.solMarketFactory.solMultiInvoker.solOracle.solOracleFactory.solVault.solVaultFactory.sol
Audit ResultsSummary
AppendixVault inflation POC codeNegative Liquidation PoC codeMultiInvoker drain POC code

USDC depeg can lead to undercollateralized positions

Perennial is a USD-settled protocol, and the oracle price feeds are expected to be USD based. All settlements happen in DSU, however, which is USDC based. Therefore, in the case of a USDC depeg, undercollateralized positions may be created.

The undercollateralized positions created during a USDC depeg do not lead to any accounting errors within the protocol. They also balance out after the depeg period ends, so there is no lasting impact.

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