bToken

migrateBToken function in the BPOOL module is a permissioned function and it should be called via policies. However, none of the policies have permission to call this function.

Consider which policy is expected to call this function and add the function’s selector to the requestPermissions process.

Baseline Team: Acknowledged.

ERC20 features are moved from BPOOL to separate BToken contract with the current update. However, the locked status still remains in the BPOOL contract, in addition to the BToken contract, creating an asymmetry.

The setTransferLock function correctly updates the locked status of the BToken contract, but there is no mechanism to update the locked status in BPOOL. Since BPOOL.locked is set to true in the constructor, it will always appear locked.

This will lead to discrepancies for integrators who read BPOOL.locked instead of BPOOL.bToken.locked.

Remove the locked from the BPOOL and use it only from the BToken.

Baseline Team: The issue was resolved in commit 9e4a37e.

In the function _loop, an early exit occurs if minimumCollateral is hit. This is called after the borrow operation.

However, if _bAssetsIn is too small, the borrow operation could revert as no new principal is transferred out. This would result in the entire reheat operation reverting.

The early exit for minimumCollateral should be done before the borrow operation.

Baseline Team: The issue was resolved in commit 4e6670a.

In the reheat function, the probability denominator is incremented with each successful hit to make future hits less likely.

However, when reserveSize = 0, no swap occurs despite the successful hit, but the probability denominator is still incremented.

This reduces the likelihood of true hits (where actual swaps occur) since hits that result in no swaps still affect the probability, making legitimate hits less frequent.

Consider incrementing the probability denominator only if a swap occurs.

Baseline Team: Acknowledged.

The setController is a critical function that hands control of mint/burn ability to a new address. Given the importance of the function, consider validating the new controller address to avoid handing control to an unintended address.

Validate that _controller is not a zero address and consider implementing a two-step handover process.

Baseline Team: Acknowledged.

console2 imports were found in:

• LOOPS.v1.sol
• BaselineInit.sol
• LoopFacility.sol
• MarketMaking.sol

Remove the import statements.

Baseline Team: The issue was resolved in commit 9e4a37e.

Comments on the function drop and _decrementSweepTick indicate that tick will be moved exactly one tick spacing lower. However, with the revised _getDecrementedSweepTick, it is possible to move the tick by more than one tick spacing.

Additionally, the “transfer any surplus collateral back to the bAsset contract” comment in the LOOPS contract is incorrect, and it should be “transfer any surplus collateral back to the BPOOL contract”.

Update developer comments.

Baseline Team: The issue was resolved in commit 4e6670a.

When the premium between the active price and BLV is too high, no reserves are swapped during reheat due to capital inefficiency.

However, bAssets are still converted to reserves via borrowing from the CreditFacility and defaulting on self, which burns bAsset collateral.

Burning tokens can create upward pressure on the price, further increasing the premium, which is undesirable.

If the premium is too high, consider gracefully exiting without performing any borrowing or swapping actions.

Baseline Team: Acknowledged.