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+# Issue M-1: Incorrect rounding in the `ReputationMarket._calcCost()` function. 
+
+Source: https://github.com/sherlock-audit/2024-12-ethos-update-judging/issues/66 
+
+## Found by 
+0xaxaxa, Al-Qa-qa, X12, bughuntoor, moray5554, tnquanghuy0512, whitehair0330
+### Summary
+
+When buying and selling, the cost is calculated using rounding based on `isPositive`. However, the rounding should be based on `isBuy`, not `isPositive`.
+
+### Root Cause
+
+The [_calcCost()](https://github.com/sherlock-audit/2024-12-ethos-update/blob/main/ethos/packages/contracts/contracts/ReputationMarket.sol#L1057) function calculates `cost` by rounding based on `isPositive`.
+
+If `isPositive` is `false` (indicating that `DISTRUST` votes are being traded), the calculation is rounded up.
+
+Consider the following scenario:
+
+1. A user buys 2 `DISTRUST` votes.
+2. The user sells a `DISTRUST` vote.
+3. The user sells another `DISTRUST` vote.
+
+During the buying process, rounding up occurs once, but when selling, rounding up occurs twice—at steps 2 and 3. As a result, `marketFunds` will be decremented by a dust amount.
+
+If `marketFunds` was originally 0 (with the market created by the admin at a 0 creation cost), then step 3 becomes impossible.
+
+In fact, `isPositive` is never related to the rounding direction.
+
+```solidity
+      function _calcCost(
+        Market memory market,
+        bool isPositive,
+        bool isBuy,
+        uint256 amount
+      ) private pure returns (uint256 cost) {
+        ...
+
+        int256 costRatio = LMSR.getCost(
+          market.votes[TRUST],
+          market.votes[DISTRUST],
+          voteDelta[0],
+          voteDelta[1],
+          market.liquidityParameter
+        );
+
+        uint256 positiveCostRatio = costRatio > 0 ? uint256(costRatio) : uint256(costRatio * -1);
+        // multiply cost ratio by base price to get cost; divide by 1e18 to apply ratio
+        cost = positiveCostRatio.mulDiv(
+          market.basePrice,
+          1e18,
+1057      isPositive ? Math.Rounding.Floor : Math.Rounding.Ceil
+        );
+      }
+```
+
+### Internal pre-conditions
+
+### External pre-conditions
+
+### Attack Path
+
+### Impact
+
+The last vote might not be sold.
+
+### PoC
+
+### Mitigation
+
+Use `!isBuy` instead of `isPositive`.
+
+```diff
+        cost = positiveCostRatio.mulDiv(
+          market.basePrice,
+          1e18,
+-         isPositive ? Math.Rounding.Floor : Math.Rounding.Ceil
++         !isBuy ? Math.Rounding.Floor : Math.Rounding.Ceil
+        );
+```
+