Users with Negligible TST Holdings Might Not Receive Their Share of EUROs Fees

Severity

Medium Risk

Relevant GitHub Links

https://github.com/Cyfrin/2023-12-the-standard/blob/91132936cb09ef9bf82f38ab1106346e2ad60f91/contracts/LiquidationPool.sol#L182-L194

Summary

The fee distribution mechanism in the provided Solidity contract may result in perceived unfairness, especially for users with negligible TST holdings. The distribution is proportional to users' TST holdings relative to the total, potentially leading to extremely small or negligible EUROs fee allocations for users with minimal contributions.

Vulnerability Details

In the distributeFees function, the EUROs fees are distributed among users based on the proportion of their TST holdings to the total TST holdings. Here is the relevant code snippet:

function distributeFees(uint256 _amount) external onlyManager {
    uint256 tstTotal = getTstTotal();
    if (tstTotal > 0) {
        IERC20(EUROs).safeTransferFrom(msg.sender, address(this), _amount);
        for (uint256 i = 0; i < holders.length; i++) {
            address _holder = holders[i];
            positions[_holder].EUROs += _amount * positions[_holder].TST / tstTotal;
        }
        for (uint256 i = 0; i < pendingStakes.length; i++) {
            pendingStakes[i].EUROs += _amount * pendingStakes[i].TST / tstTotal;
        }
    }
}

The EUROs fees are distributed based on the proportion of a user's TST holdings to the total TST holdings. Users with negligible TST holdings may receive extremely small or no EUROs fees.

Impact

Users with negligible TST holdings might perceive the fee distribution as unfair, potentially leading to dissatisfaction and trust issues with the protocol.

Tools Used

Manual

Recommendations

Consider implementing a minimum threshold or alternative distribution model that ensures users with very small TST holdings are either ineligible for fee distribution or receive a more equitable share.