#46930 [SC-Low] `depositNat()` in `CollateralPool` Fails to Notify Asset Manager, By not calling the `updateCollateral`

Submitted on Jun 6th 2025 at 11:47:31 UTC by @danvinci_20 for Audit Comp | Flare | FAssets

• Report ID: #46930

• Report Type: Smart Contract

• Report severity: Low

• Target: https://github.com/flare-foundation/fassets/blob/main/contracts/assetManager/facets/MintingFacet.sol

• Impacts:

  • Contract fails to deliver promised returns, but doesn't lose value

Description

Description

The CollateralPool contract includes a depositNat() function that allows the asset manager to deposit native currency (msg.value). However, this function does not call updateCollateral(), which is essential to notifying the agent collateral system that a deposit has occurred. As a result, although the internal totalCollateral value in the pool is updated, the broader system remains unaware of the collateral change.

This breaks critical collateral synchronization between CollateralPool and the asset manager, potentially allowing incorrect liquidation behavior and desynchronization of agent status.

function depositNat()
    external payable
    onlyAssetManager
{
    @>> _depositWNat();
}

function _depositWNat()
    internal
{
    // msg.value is always > 0 in this contract
    if (msg.value > 0) {
        totalCollateral += msg.value;
       @>> wNat.deposit{value: msg.value}();
    }
}

unlike the agentVault the depositNat calls the updateCollateral() as intended:

 // used by asset manager to transfer collateral reservation fee to the agent vault
    function depositNat(IWNat _wNat)
        external payable override
        onlyAssetManager
    {
        _wNat.deposit{value: msg.value}();
        assetManager.updateCollateral(address(this), _wNat);
        _tokenUsed(_wNat, TOKEN_DEPOSIT);
    }

Impact Details

This can lead to Incorrect Liquidation Status, since The agent remains in liquidation despite meeting collateral requirements.

Recommendation

Ensure that every deposit function that affects an agent's collateral position calls assetManager.updateCollateral() immediately after the deposit is complete. This guarantees consistency and ensures that liquidation and recovery flows function as intended.

Proof of Concept

Proof of Concept

Consider the following scenario:

1. An agent’s collateral ratio drops below the minimum, triggering liquidation.

2. The asset manager calls the CollateralReservations.distributeCollateralReservationFee()expects a deposit which can help to rescue the agent (through depositNat()).

3. The deposit goes through to the collateralPool via CollateralPool.depositNat(), which updates totalCollateral, but does not update the asset manager.

As a result, the system continues to treat the agent as undercollateralized unfairly. This can result in the liquidation process continuing despite the agent having sufficient funds.