nikhilx0111 - incorrect slippage in _calculateMinRepayUnits

[sherlock-admin2]

nikhilx0111

High

incorrect slippage in _calculateMinRepayUnits

Summary

The _calculateMinRepayUnits function calculates the repayment amount needed to reduce leverage on a debt position, taking into account the acceptable slippage when repaying the debt. However, the implementation of slippage in the calculation is incorrect.

function _calculateMinRepayUnits(uint256 _collateralRebalanceUnits, uint256 _slippageTolerance, ActionInfo memory _actionInfo) internal virtual pure returns (uint256) {
    return _collateralRebalanceUnits
        .mul(_actionInfo.collateralPrice).div(MORPHO_ORACLE_PRICE_SCALE)
        .preciseMul(PreciseUnitMath.preciseUnit().sub(_slippageTolerance));
}

the function subtracts the slippage tolerance. This is incorrect because, when accounting for acceptable slippage, the calculation should add the acceptable percentage instead of subtracting it. As a result, the function will calculate the minimum repayment amount incorrectly, attempting to repay less than intended due to the misapplication of the slippage tolerance.

Root Cause

https://github.com/sherlock-audit/2024-10-morpho-x-index/blob/2f125406e0dd3b1fc029b9a47fe97bfbf906fce2/index-coop-smart-contracts/contracts/adapters/MorphoLeverageStrategyExtension.sol#L1165-L1169
No response

Internal pre-conditions

No response

External pre-conditions

No response

Attack Path

No response

Impact

this will cause unnecessary revert when trying to repay/deleverage even when the slippage is within acceptable range which can temporarily dos the protocol

PoC

No response

Mitigation

To correct this, the calculation should add the slippage tolerance.