Submitted by hyh, also found by csanuragjain, minhquanym, and Treasure-Seeker
Zero and near zero strike calls are common derivative type. For such derivatives the system will not be receiving fees are the fee is now formulated as a fraction of order strike.
Also, it can be a problem for OTM call options, when the option itself is nearly worthless, while the fee will be substantial as strike will be big. Say 1k ETH BAYC call doesnt have much value, but the associated fee will be 10x of usual fee, i.e. substantial, while there is nothing to justify that.
Marking this as medium severity as thats a design specifics that can turn off or distort core system fee gathering.
Currently fee is linked to the order strike which makes it vary heavily for different types of orders, for example deep ITM and OTM calls:
https://github.com/code-423n4/2022-06-putty/blob/3b6b844bc39e897bd0bbb69897f2deff12dc3893/contracts/src/PuttyV2.sol#L494-L506
Consider linking the fee to option premium as this is option value that cannot be easily manipulated and exactly corresponds to the trading volume of the system.
i.e. consider moving fee gathering to fillOrder:
https://github.com/code-423n4/2022-06-putty/blob/3b6b844bc39e897bd0bbb69897f2deff12dc3893/contracts/src/PuttyV2.sol#L322-L340
Alex the Entreprenerd (warden) commented:
outdoteth (Putty Finance) confirmed and commented:
outdoteth (Putty Finance) resolved:
hyh (warden) reviewed mitigation:
