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LiquidityPenaltyHook: review notes #142

Description

@luiz-lvj

Grouping a set of observations about LiquidityPenaltyHook in one place, for tracking and to reduce duplicate reports. Items are summarized briefly and are not all confirmed. No severity is assigned here.

  • Removal can revert without in-range liquidity — When a penalty is due, the donation step reverts if there is no active in-range liquidity to receive it, so a removal can be blocked until in-range liquidity exists or the penalty window elapses. Related to Prevent liquidity removal in LiquidityPenaltyHook if there is no liquidity to receive the penalty. #73.
  • Penalty donation can go to recent liquidity — The penalty is redistributed via donate, which credits whatever liquidity is in range at that moment and does not consider liquidity age, so recently added in-range liquidity can receive a share of the penalty.

Source: src/general/LiquidityPenaltyHook.sol.

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