# No check for sequencer uptime can lead to dutch auctions executing at bad prices

Dutch auction on L2 lacks sequencer uptime check, so during downtime price keeps falling and buyers snap up tokens below market on recovery.

- Payout: Contest reward
- Severity: medium
- Program: Index
- Credited: 0x52
- Disclosed: 2023-06-20
- Write-up quality: 6/10
- Original: https://github.com/sherlock-audit/2023-06-Index-judging/issues/40
- Library page: https://bugbountylibrary.com/r/sherlock%3A2023-06-Index%3AM-3
- Tags: domain:web3 impact:funds-loss kind:contest platform:sherlock sev:medium tech:evm technique:source-review vuln:business-logic vuln:oracle-manipulation

**Target:** AuctionRebalanceModuleV1 dutch auction purchase logic on L2
**Root cause:** Auction price decays with block.timestamp without verifying L2 sequencer uptime, so a sequencer outage lets the auction price drift past market price before any bid can land.
**Steps:**
1. Deploy/observe AuctionRebalanceModuleV1 dutch auction on an L2 with min/max price bounds around market price
2. Sequencer goes offline during auction period; no L1-originated tx can interact because aliased addresses aren't supported
3. Auction price continues decreasing via timestamp-based decay while sequencer is down
4. Sequencer returns; user calls the auction purchase function `buyTokens` at the now-depressed price, below market
**How found:** Researcher reasoned about L2-specific failure modes: sequencer downtime forces L1-originated (aliased) transactions, which the protocol can't process, while timestamp-based dutch auction pricing keeps decaying — spotting the mismatch between price decay and inability to bid.
**Exploitation:** Attacker waits for an L2 sequencer outage during an active dutch auction, then buys tokens immediately on recovery at the decayed price, capturing the gap between auction price and market price at the SetToken's expense.
**Insight:** For any timestamp-driven pricing/auction logic on L2, check whether sequencer uptime is validated (e.g. Chainlink L2 sequencer feed); downtime silently advances price curves without allowing counter-bids.