Monolith Stablecoin Factory: Interest accounting could undercharge borrowers

Summary

Monolith’s interest accounting could charge borrowers less than the model intended. The shortfall came from the calculation itself, reducing the income available to lenders and stablecoin stakers.

Root cause

Different parts of the interest formula used incompatible numeric scales. Combining those amounts without normalizing their units caused part of the accumulated interest to contribute far less than it should.

Attack scenario

The published finding describes undercharging during ordinary borrowing activity as rates change over time. A borrower could benefit from the accounting error without needing administrative privileges or access to another user’s funds.

Impact

Lenders and stakers could receive less yield than the intended rate model provided for. The accounting error shifted value away from those supplying capital by reducing the interest charged to borrowers.

Fix recommendation

Normalize units before combining interest components and check the result against an independent mathematical reference across rate changes. The public final report does not identify a remediation for this finding.