A critical protocol insolvency bug in Fringe.fi's lending platform allows borrowers to withdraw collateral without updating accrued interest, leaving the protocol with undercollaterized positions that cannot be liquidated. The vulnerability exploits the fact that updateInterestInBorrowPositions() is only called when withdrawing the maximum amount, enabling attackers to maintain stale accrual values and manipulate their health factor below the required 1.0 threshold.
Iron Bank's CCollateralCapERC20 token fails to enforce the collateralCap invariant during account initialization via initializeAccountCollateralTokens(), allowing the total collateral to exceed the cap and exposing the protocol to liquidation insolvency risks. The vulnerability exists because initialization bypasses the increaseUserCollateralInternal() cap check that other collateral increase operations enforce.