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moneyversed

medium

Potential for locked collateral

Summary

In the CollateralEscrowV1.sol contract, there is a risk of locked collateral when interacting with ERC20 tokens that have the transfer functionality paused or disabled.

Vulnerability Detail

The CollateralEscrowV1.sol contract does not account for the possibility of ERC20 tokens having their transfer functionality paused or disabled. This could result in collateral being locked within the contract, preventing users from withdrawing or liquidating their collateral.

Impact

Locked collateral could result in financial loss for users and decreased confidence in the platform's security.

Code Snippet

https://github.com/sherlock-audit/2023-03-teller/blob/main/teller-protocol-v2/packages/contracts/contracts/escrow/CollateralEscrowV1.sol#L1

Tool used

Manual Review

Recommendation

Add checks to ensure that ERC20 tokens used as collateral have their transfer functionality enabled before interacting with them in the CollateralEscrowV1.sol contract. This will help prevent the risk of locked collateral and protect users' funds.