57526 sc medium stargateethpoolstrategy rounding mismatch freezes vaultv2 allocations

#57526 [SC-Medium] `StargateEthPoolStrategy` rounding mismatch freezes `VaultV2` allocations

Submitted on Oct 26th 2025 at 23:57:13 UTC by @pxng0lin for Audit Comp | Alchemix V3

• Report ID: #57526

• Report Type: Smart Contract

• Report severity: Medium

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

• Impacts:

  • Permanent freezing of funds

Description

Bug Description

StargateEthPoolStrategy._allocate floors deposits to 1e12 but returns the unfloored amount. VaultV2 return value records more assets than the adapter actually deploys. On withdrawal, StargateEthPoolStrategy._deallocate cannot supply the overstated amount and reverts with "Strategy balance is less than the amount needed", permanently freezing funds.

Brief/Intro

As shown in the sequence flow, the allocator sends amount WETH through VaultV2 into StargateEthPoolStrategy. The strategy unwraps, deposits only amountRounded, yet reports the full amount back to the vault. VaultV2 records that figure as live capital, so when the allocator later requests the same amount, _deallocate can only pull amountRounded from Stargate and reverts, locking the position.

Details

1. Allocator calls VaultV2.allocate. The vault transfers amount WETH to the adapter and invokes IAdapter.allocate.

2. StargateEthPoolStrategy._allocate unwraps WETH, computes amountRounded = (amount / 1e12) * 1e12, deposits only amountRounded, yet returns the original amount.

3. VaultV2.allocate adds amount to caps[id].allocation, so vault accounting now exceeds real assets.

4. Later the allocator calls VaultV2.deallocate(..., amount). StargateEthPoolStrategy._deallocate redeems LP for amountRounded, wraps back to WETH, then checks that its balance covers amount; the check fails and the function reverts.

5. The vault never reduces the inflated allocation, the dust remains idle on the adapter, and no withdrawals can succeed.

Sequence Diagram

sequenceDiagram
    participant Allocator
    participant VaultV2
    participant StargateStrategy
    participant StargatePool

    Allocator->>VaultV2: allocate(strategy, prevAlloc, amount)
    VaultV2->>StargateStrategy: allocate(data, amount)
    StargateStrategy->>StargatePool: deposit amountRounded
    StargateStrategy-->>VaultV2: return change = amount
    VaultV2->>VaultV2: allocation += amount

    Allocator->>VaultV2: deallocate(strategy, prevAlloc+amount, amount)
    VaultV2->>StargateStrategy: deallocate(data, amount)
    StargateStrategy->>StargatePool: redeem amountRounded
    StargateStrategy-->>VaultV2: revert "Strategy balance is less than the amount needed"

Impact

• Permanent freezing of user funds: recorded allocations can never be withdrawn once dust is present (critical impact).

• Ongoing insolvency risk: repeated allocations widen the gap between vault accounting and strategy assets.

Risk Breakdown

• Difficulty: Low. Standard allocator operations trigger the bug.

• Prerequisites: Allocator privileges (normal vault role).

• User action: None; even honest deposits are vulnerable.

Recommendation

Return amountRounded from StargateEthPoolStrategy._allocate.

References

• StargateEthPoolStrategy._allocate @src/strategies/optimism/StargateEthPoolStrategy.sol#42-53

• StargateEthPoolStrategy._deallocate @src/strategies/optimism/StargateEthPoolStrategy.sol#55-81

• VaultV2.allocate and VaultV2.deallocate @lib/vault-v2/src/VaultV2.sol#564-608

Proof of Concept

Proof of Concept

• Add the test code to the existing StargateEthPoolStrategy.t.sol test file.

• run the test with forge t --mt testStrategyAllocateDeallocate_VaultV2_reverts_permanent_freeze -vvvv (higher verbosity to see the fails as expectRevert() has been used)

• The test allocates through the vault, leaves dust on the adapter, and shows VaultV2.deallocate reverting with "Strategy balance is less than the amount needed".

Test Code

 function testStrategyAllocateDeallocate_VaultV2_reverts_permanent_freeze(uint256 fuzzAmount) public {
        // Allocate via the real vault/allocator path with an amount that is not divisible by 1e12.
        uint256 amountToAllocate = bound(fuzzAmount, 1e12 + 1, testConfig.vaultInitialDeposit);
        uint256 dust = amountToAllocate - (amountToAllocate / 1e12) * 1e12;
        vm.assume(dust > 0);

        uint256 amountToDeposit = amountToAllocate - dust;
        bytes32 adapterId = IMYTStrategy(strategy).adapterId();
        uint256 previousAllocation = IVaultV2(vault).allocation(adapterId);

        vm.startPrank(allocator);
        console.log("allocator allocate", amountToAllocate);
        IVaultV2(vault).allocate(strategy, abi.encode(previousAllocation), amountToAllocate);
        vm.stopPrank();

        uint256 vaultRecordedAllocation = IVaultV2(vault).allocation(adapterId);
        assertEq(vaultRecordedAllocation, previousAllocation + amountToAllocate, "vault believes full amount allocated");

        uint256 initialRealAssets = IMYTStrategy(strategy).realAssets();
        assertEq(initialRealAssets, amountToDeposit, "realAssets should exclude dust");
        assertEq(address(strategy).balance, dust, "dust should remain as plain ETH");
        console.log("real assets tracked", initialRealAssets);
        console.log("dust remaining", dust);

        vm.startPrank(allocator);
        console.log("allocator deallocate", amountToAllocate);
        vm.expectRevert(bytes("Strategy balance is less than the amount needed"));
        IVaultV2(vault).deallocate(strategy, abi.encode(vaultRecordedAllocation), amountToAllocate);
        vm.stopPrank();
    }