Cryptor - Precision loss in calculation of totalRebalanceNotional

[sherlock-admin]

Cryptor

high

Precision loss in calculation of totalRebalanceNotional

Summary

The function _calculateChunkRebalanceNotional may calculate the wrong value for totalRebalanceNotional, resulting in the wrong leverage ratio in _updateRebalanceState

Vulnerability Detail

The function _calculateChunkRebalanceNotional calculates the value for totalRebalanceNotional as follows

uint256 totalRebalanceNotional = leverageRatioDifference.preciseDiv(_leverageInfo.currentLeverageRatio).preciseMul(_leverageInfo.action.collateralBalance);

https://github.com/sherlock-audit/2023-05-Index/blob/main/index-coop-smart-contracts/contracts/adapters/AaveLeverageStrategyExtension.sol#L1068

This will result in a precision loss as division is performed before multiplication. This may affect the result of _updateRebalanceState
which calculates a different leverage ratio depending on the value of totalRebalanceNotional

if (_chunkRebalanceNotional < _totalRebalanceNotional) { twapLeverageRatio = _newLeverageRatio; }

https://github.com/sherlock-audit/2023-05-Index/blob/main/index-coop-smart-contracts/contracts/adapters/AaveLeverageStrategyExtension.sol#L1169-L1171

Impact

The function may return the incorrect leverage ratio, when calling critical functions (engage, disengage, ripcord)

Code Snippet

https://github.com/sherlock-audit/2023-05-Index/blob/main/index-coop-smart-contracts/contracts/adapters/AaveLeverageStrategyExtension.sol#L1068

https://github.com/sherlock-audit/2023-05-Index/blob/main/index-coop-smart-contracts/contracts/adapters/AaveLeverageStrategyExtension.sol#L1169-L1171

Tool used

Manual Review

Recommendation

Perform multiplication first and then do the division.

Duplicate of #299