56336 sc insight stargateethpoolstrategy deallocate would emit false deallocating loss event in some cases

Submitted on Oct 14th 2025 at 17:17:36 UTC by @farismaulana for Audit Comp | Alchemix V3

• Report ID: #56336

• Report Type: Smart Contract

• Report severity: Insight

• Target: https://github.com/alchemix-finance/v3-poc/blob/immunefi_audit/src/strategies/optimism/StargateEthPoolStrategy.sol

• Impacts:

Description

Brief/Intro

the _deallocate amount param is capped to lpBalance if the amount param is greater than the contract balance. but the check ethRedeemed < amount is using amount for comparison which is not always the amount used for redeem because the above cap mechanism.

Vulnerability Details

    function _deallocate(uint256 amount) internal override returns (uint256) {
        // Compute LP needed ∝ TVL to withdraw `amount` underlying
        // For Stargate, LP tokens are 1:1 with underlying
        // So we can just redeem the amount directly
        uint256 lpBalance = lp.balanceOf(address(this));
        uint256 lpNeeded = amount; // 1:1 ratio

        // Cap at available LP balance
        if (lpNeeded > lpBalance) {
@>          lpNeeded = lpBalance;
        }

        // Redeem LP to native ETH, then wrap back to WETH
        lp.approve(address(pool), lpNeeded);
        uint256 ethBalanceBefore = address(this).balance;
@>      pool.redeem(lpNeeded, address(this));
        uint256 ethBalanceAfter = address(this).balance;
        uint256 ethRedeemed = ethBalanceAfter - ethBalanceBefore;
        // @audit
        if (ethRedeemed < amount) {
            emit StrategyDeallocationLoss("Strategy deallocation loss which includes rounding loss.", amount, ethRedeemed);
        }

here we can see that if the amount assigned to lpNeeded. for some case where it is capped to lpBalance, the redeem call would use this lpBalance that always result in lower ethRedeemed than the amount thus it would always emitting the event which is not necessarily true.

Impact Details

possibly emitting deallocation loss when it is not

References

https://github.com/alchemix-finance/v3-poc/blob/b2e2aba046c36ff5e1db6f40f399e93cd2bdaad0/src/strategies/optimism/StargateEthPoolStrategy.sol#L73-L74

Proof of Concept

Proof of Concept

1. contract deallocating 100 LP amount

2. currently the contract is having 99.8 LP amount

3. cap the amount, and call pool.redeem using 99.8 LP, and get 99.8 ether

4. check if the ethRedeemed < amount which is 99.8 < 100

5. emit the deallocation loss event, even though that is all LP token the contract have and no deallocation loss happen