# 58428 sc low toke reward loss when calling deallocate **Submitted on Nov 2nd 2025 at 09:21:02 UTC by @SOPROBRO for** [**Audit Comp | Alchemix V3**](https://immunefi.com/audit-competition/alchemix-v3-audit-competition) * **Report ID:** #58428 * **Report Type:** Smart Contract * **Report severity:** Low * **Target:** * **Impacts:** * Permanent freezing of unclaimed royalties ## Description ## Brief/Intro When you `deallocate` funds, `TOKE` rewards are sent to the strategy contract instead of the MORPHO vault (`MYT`). Since the strategy has no mechanism to withdraw or forward these tokens, the rewards become permanently locked. ## Vulnerability Details During deallocation in `TokeAutoUSDStrategy` and `TokeAutoEth`: ```solidity rewarder.withdraw(address(this), sharesNeeded, true); ``` This triggers the following in `rewarder::_withdraw` (1): ```solidity if (claim) { _processRewards(account, account, true); } ``` Since `account` is `address(this)` (the strategy), the rewarder sends rewards to the strategy contract itself (2): ``` _processRewards(address account, address recipient, bool claimExtras) ``` The strategy does not expose any method to recover these rewards, effectively locking all accrued `TOKE` tokens. ## Impact Details The impact of this is locked `TOKE` rewards, particularly in `TokeAutoUSDStrategy`, which lacks a `_claimRewards` implementation altogether — meaning the only reward path is through `deallocate`, which locks the rewards. ## References (1) (2) ## Proof of Concept Add the following import to the top of `TokeAutoETHStrategy` ```solidity import "forge-std/Test.sol"; ``` Then add the following test, and run in the console `forge test --mt test_strat_loses_rewards -vv` ```solidity function test_strat_loses_rewards() public { uint256 amountToAllocate = 1e18; uint256 amountToDeallocate = amountToAllocate / 2; vm.startPrank(vault); deal(testConfig.vaultAsset, 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.roll(block.number + 1); // IMYTStrategy(strategy).claimRewards(); IMYTStrategy(strategy).deallocate(prevAllocationAmount2, amountToDeallocate, "", address(vault)); console.log("Balance of TOKE in MYT Vault %e", IERC20(0x2e9d63788249371f1DFC918a52f8d799F4a38C94).balanceOf(vault)); console.log("Balance of TOKE in Strategy %e", IERC20(0x2e9d63788249371f1DFC918a52f8d799F4a38C94).balanceOf(strategy)); } ``` From the logs, we can clearly see the `TOKE` is sent to the Strategy instead of the MYT Vault during deallocation, you can uncomment the `// IMYTStrategy(strategy).claimRewards();` to see the `claimRewards` will send the TOKE to the MYT Vault. ```md Logs: Balance of TOKE in MYT Vault 0e0 Balance of TOKE in Strategy 7.1596749037491e13 ``` --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://reports.immunefi.com/alchemix-v3/58428-sc-low-toke-reward-loss-when-calling-deallocate.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.