Submitted by CodexBugmenot, also found by 056Security, 0xvd, A0z9, DoD4uFN, EPSec, eternal1328, Greed, newspacexyz, potatoad-sec, vladi319, and Zkillua
https://github.com/code-423n4/2025-01-iq-ai/blob/b16b866d4c8d3e4a69b37a02c4e396d4b294537e/src/LiquidityManager.sol#L137
When LiquidityManager::moveLiquidity function is called then either a new FraxSwapPair is created with a fee of 1% or if a pair already exists then the liquidity is transferred to that FraxSwapPair but the issue is that any user can deploy this FraxSwapPair with fee as low as 0.01% which can only be changed back by the owner of the FraxSwapFactory and if left unchecked will result in loss of fee for the protocol.
Paste the following POC in MoveLiquidityTest.sol:
Change the Fee in FraxSwapPair deployment from 1 to 100 to change fee from 0.01% to 1%:
From the Above test : 
Now for much higher transactions, including the 3 swaps done during the moveLiquidity, all that fee is lost to the protocol.
This issue exists for every new Agent created in AgentFactory and it is not feasible for the owner to check fee amount on every pair so, consider creating a new FraxSwapPair with the desired fee in AgentFactory::createAgent itself to avoid these fee discrepancies. 
Consider any design change which will prevent arbitrary users to set fee.
Denett (IQ AI) commented:
0xnev (judge) commented:
