Audit fixes

README.md

@@ -38,7 +38,7 @@ The two main use-cases are:
 
 ### Pre-liquidation parameters restrictions
 
-The PreLiquidation smart-contract enforces the following properties:
+The PreLiquidation smart-contract enforces the properties:
 
 - preLltv < LLTV;
 - preLCF1 <= preLCF2;
@@ -64,6 +64,14 @@ It's possible to use the corresponding market oracle or any other oracle includi
 PreLiquidation contract addresses are generated using the CREATE2 opcode, allowing for predictable address computation depending on pre-liquidation parameters.
 The [`PreLiquidationAddressLib`](./src/libraries/periphery/PreLiquidationAddressLib.sol) library provides a `computePreLiquidationAddress` function, simplifying the computation of a PreLiquidation contract's address.
 
+### Potential preLCF manipulation
+
+A pre-liquidation cannot repay a proportion of the position's debt greater than `preLCF`.
+However, it's possible to pre-liquidate a proportion of the position while keeping it pre-liquidatable before performing another pre-liquidation.
+This manipulation can lead to repaying a proportion of the position's debt higher than `preLCF`.
+It has been studied in the part 5.2 of [An Empirical Study of DeFi Liquidations:Incentives, Risks, and Instabilities](https://arxiv.org/pdf/2106.06389), in the case of a constant liquidation close factor.
+Implementing a `preLCF` linear in the health factor can help mitigating this manipulation when choosing the right slope.
+
 ## Getting started
 
 ### Package installation
@@ -74,6 +82,10 @@ Install [Foundry](https://book.getfoundry.sh/getting-started/installation).
 
 Run `forge test`.
 
+## Solidity version
+
+As a consequence of using Solidity 0.8.27, the bytecode of the contracts could contain new opcodes (e.g., `PUSH0`, `MCOPY`, `TSTORE`, `TLOAD`) so one should make sure that the contract bytecode can be handled by the target chain for deployment.
+
 ## Audits
 
 All audits are stored in the [`audits`](./audits) folder.

src/PreLiquidation.sol

@@ -150,7 +150,8 @@ contract PreLiquidation is IPreLiquidation, IMorphoRepayCallback {
         require(borrowed > collateralQuoted.wMulDown(PRE_LLTV), ErrorsLib.NotPreLiquidatablePosition());
 
         uint256 ltv = borrowed.wDivUp(collateralQuoted);
-        uint256 preLIF = (ltv - PRE_LLTV).wDivDown(LLTV - PRE_LLTV).wMulDown(PRE_LIF_2 - PRE_LIF_1) + PRE_LIF_1;
+        uint256 quotient = (ltv - PRE_LLTV).wDivDown(LLTV - PRE_LLTV);
+        uint256 preLIF = quotient.wMulDown(PRE_LIF_2 - PRE_LIF_1) + PRE_LIF_1;
 
         if (seizedAssets > 0) {
             uint256 seizedAssetsQuoted = seizedAssets.mulDivUp(collateralPrice, ORACLE_PRICE_SCALE);
@@ -165,7 +166,7 @@ contract PreLiquidation is IPreLiquidation, IMorphoRepayCallback {
 
         // Note that the pre-liquidation close factor can be greater than WAD (100%).
         // In this case the position can be fully pre-liquidated.
-        uint256 preLCF = (ltv - PRE_LLTV).wDivDown(LLTV - PRE_LLTV).wMulDown(PRE_LCF_2 - PRE_LCF_1) + PRE_LCF_1;
+        uint256 preLCF = quotient.wMulDown(PRE_LCF_2 - PRE_LCF_1) + PRE_LCF_1;
 
         uint256 repayableShares = uint256(position.borrowShares).wMulDown(preLCF);
         require(repaidShares <= repayableShares, ErrorsLib.PreLiquidationTooLarge(repaidShares, repayableShares));

src/interfaces/IPreLiquidation.sol

@@ -4,11 +4,11 @@ pragma solidity >= 0.5.0;
 import {Id, IMorpho, MarketParams} from "../../lib/morpho-blue/src/interfaces/IMorpho.sol";
 
 /// @notice The pre-liquidation parameters are:
-///  - preLltv, the maximum LTV of a position before allowing pre-liquidation.
-///  - preLCF1, the pre-liquidation close factor when the position LTV is equal to preLltv.
-///  - preLCF2, the pre-liquidation close factor when the position LTV is equal to LLTV.
-///  - preLIF1, the pre-liquidation incentive factor when the position LTV is equal to preLltv.
-///  - preLIF2, the pre-liquidation incentive factor when the position LTV is equal to LLTV.
+///  - preLltv, the maximum LTV of a position before allowing pre-liquidation, scaled by WAD.
+///  - preLCF1, the pre-liquidation close factor when the position LTV is equal to preLltv, scaled by WAD.
+///  - preLCF2, the pre-liquidation close factor when the position LTV is equal to LLTV, scaled by WAD.
+///  - preLIF1, the pre-liquidation incentive factor when the position LTV is equal to preLltv, scaled by WAD.
+///  - preLIF2, the pre-liquidation incentive factor when the position LTV is equal to LLTV, scaled by WAD.
 ///  - preLiquidationOracle, the oracle used to assess whether or not a position can be preliquidated.
 struct PreLiquidationParams {
     uint256 preLltv;

src/libraries/ErrorsLib.sol

@@ -1,5 +1,5 @@
 // SPDX-License-Identifier: GPL-2.0-or-later
-pragma solidity ^0.8.27;
+pragma solidity ^0.8.0;
 
 /// @title ErrorsLib
 /// @author Morpho Labs