Note: At the judges request here, this downgraded issue from the same warden has been included in this report for completeness.
Taking a look here, one can see that this function is used to liquidate a position with having a healthy check to ensure that positions being liquidated are actually the ones that are not afloat.
Problem is that protocol has clearly stated that they would deploy to any EVM compatible chain which include different L2s, but no sequencer checks are present in protocol. This leads to a scenario where if the sequencer ever goes down and comes back up users wouldnt have enough time to get their positions back afloat since all price updates would be immediately consumed after the sequencer comes back up (note that while the sequencer is down users cant deposit in more capital), this now causes their positions to be immediately unfairly liquidatable.
Users would be unfairly liquidated since they do not have enough ample time to return their positions back afloat after the sequencer goes off.
Introduce L2 sequencer checks and provide a grace period for users if the sequencer ever goes down to keep their positions afloat.
Context
Note: For full discussion, see here.
