> For the complete documentation index, see [llms.txt](https://reports.immunefi.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://reports.immunefi.com/alchemix-v3/57024-sc-low-wethbalancebefore-is-computed-after-withdrawal-in-deallocate-function-in-morphoyearnogw.md). # 57024 sc low wethbalancebefore is computed after withdrawal in deallocate function in morphoyearnogwethstrategy contract leading to systematic strategydeallocationloss event emission **Submitted on Oct 22nd 2025 at 18:59:02 UTC by @Tadev for** [**Audit Comp | Alchemix V3**](https://immunefi.com/audit-competition/alchemix-v3-audit-competition) * **Report ID:** #57024 * **Report Type:** Smart Contract * **Report severity:** Low * **Target:** * **Impacts:** * Contract fails to deliver promised returns, but doesn't lose value ## Description ## Brief/Intro The MorphoYearnOGWETHStrategy contract implements the `_deallocate` function as follows: ``` function _deallocate(uint256 amount) internal override returns (uint256) { vault.withdraw(amount, address(this), address(this)); uint256 wethBalanceBefore = TokenUtils.safeBalanceOf(address(weth), address(this)); uint256 wethBalanceAfter = TokenUtils.safeBalanceOf(address(weth), address(this)); uint256 wethRedeemed = wethBalanceAfter - wethBalanceBefore; if (wethRedeemed < amount) { emit StrategyDeallocationLoss("Strategy deallocation loss.", amount, wethRedeemed); } require(wethRedeemed + wethBalanceBefore >= amount, "Strategy balance is less than the amount needed"); require(TokenUtils.safeBalanceOf(address(weth), address(this)) >= amount, "Strategy balance is less than the amount needed"); TokenUtils.safeApprove(address(weth), msg.sender, amount); return amount; } ``` Contrary to all other strategies in scope, this one computes `wethBalanceBefore` after calling `vault.withdraw` . This means `wethBalanceBefore == wethBalanceAfter` and therefore `wethRedeemed == 0`. Hence, the line `emit StrategyDeallocationLoss("Strategy deallocation loss.", amount, wethRedeemed);` is always executed, emitting the event of deallocation loss during each deallocation. ## Vulnerability Details The vulnerability lies in the incorrect logic in `_deallocate`. The snippet: ``` vault.withdraw(amount, address(this), address(this)); uint256 wethBalanceBefore = TokenUtils.safeBalanceOf(address(weth), address(this)); uint256 wethBalanceAfter = TokenUtils.safeBalanceOf(address(weth), address(this)); ``` should be : ``` uint256 wethBalanceBefore = TokenUtils.safeBalanceOf(address(weth), address(this)); vault.withdraw(amount, address(this), address(this)); uint256 wethBalanceAfter = TokenUtils.safeBalanceOf(address(weth), address(this)); ``` ## Impact Details The impact of this issue is low as it is related to incorrect logic in the contract, leading to wrong emission of events. ## Proof of Concept ## Proof of Concept Please copy paste the following test in MorphoYearnOGWETHStrategyTest.t.sol file: ``` function testStrategyDeallocationLoss(uint256 amountToAllocate, uint256 amountToDeallocate) public { amountToAllocate = bound(amountToAllocate, 1e18, testConfig.vaultInitialDeposit); amountToDeallocate = amountToAllocate; vm.startPrank(vault); deal(WETH, strategy, amountToAllocate); bytes memory prevAllocationAmount = abi.encode(0); IMYTStrategy(strategy).allocate(prevAllocationAmount, amountToAllocate, "", address(vault)); uint256 initialRealAssets = IMYTStrategy(strategy).realAssets(); require(initialRealAssets > 0, "Initial real assets is 0"); bytes memory prevAllocationAmount2 = abi.encode(amountToAllocate); vm.warp(block.timestamp + 1 days); vm.expectEmit(strategy); emit StrategyDeallocationLoss("Strategy deallocation loss.", amountToAllocate, 0); IMYTStrategy(strategy).deallocate(prevAllocationAmount2, amountToDeallocate, "", address(vault)); vm.stopPrank(); } ``` This test: * deposits `amountToAllocate` in the vault * withdraws `amountToAllocate` 1 day later Deallocation is successful, but the `StrategyDeallocationLoss` event is emitted with a value of 0 for the actual reedemed amount, which is incorrect. --- # Agent Instructions This documentation is published with GitBook. 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