58497 sc low the amount of weth redeemed is not calculated properly in morphoyearnogweth

Submitted on Nov 2nd 2025 at 19:25:54 UTC by @Josh4324 for Audit Comp | Alchemix V3

• Report ID: #58497

• Report Type: Smart Contract

• Report severity: Low

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

• Impacts:

  • Contract fails to deliver promised returns, but doesn't lose value

Description

Brief/Intro

The amount of WETH redeemed is not accurately calculated; this will make the WETH redeemed always zero, and the contract will always emit StrategyDeallocationLoss( when it didn't deallocate at a loss.

Vulnerability Details

The root cause of the issue is that the vault.withdraw function is called before the wethBalanceBefore value is queried. This means that wethBalanceBefore and wethBalanceAfter is always equal and uint256 wethRedeemed = wethBalanceAfter - wethBalanceBefore; will always be zero.

    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;
    }

Since wethRedeemed is always zero, this will always be emitted.

        if (wethRedeemed < amount) {
            emit StrategyDeallocationLoss("Strategy deallocation loss.", amount, wethRedeemed);
        }

Impact Details

The current impact is that any off-chain system that is listening to this StrategyDeallocationLoss event will always think that the contract is at a loss.

References

https://github.com/alchemix-finance/v3-poc/blob/immunefi_audit/src/strategies/mainnet/MorphoYearnOGWETH.sol?utm_source=immunefi#L50

Proof of Concept

Proof of Concept

Add to test/strategy/MorphoYearnOGWETHStrategy.t.sol

interface IERC20Lite {
    function balanceOf(address) external returns (uint);
}

    // Declare the event so the test can emit an expected log
    event StrategyDeallocationLoss(string message, uint256 amount, uint256 loss);
    function test_redeem_poc(uint256 amountToAllocate) public {
        amountToAllocate = bound(amountToAllocate, 1e18, testConfig.vaultInitialDeposit);
        uint amountToDeallocate = amountToAllocate / 2;
        vm.startPrank(vault);
        deal(WETH, strategy, amountToAllocate);
        bytes memory prevAllocationAmount = abi.encode(0);
        IMYTStrategy(strategy).allocate(prevAllocationAmount, amountToAllocate, "", address(vault));

        // Get Balance of Strategy before deallocation
        uint balanceBefore = IERC20Lite(WETH).balanceOf(address(strategy));

        bytes memory prevAllocationAmount2 = abi.encode(amountToAllocate);

        vm.expectEmit(true, true, true, true);
        emit StrategyDeallocationLoss("Strategy deallocation loss.", amountToDeallocate, 0);

        IMYTStrategy(strategy).deallocate(prevAllocationAmount2, amountToDeallocate, "", address(vault));
        vm.stopPrank();

        // Get Balance of Strategy before deallocation
        uint balanceAfter = IERC20Lite(WETH).balanceOf(address(strategy));

        console2.log("STRATEGY BALANCE Before deallocation: ", balanceBefore);

        console2.log("STRATEGY BALANCE After  deallocation: ", balanceAfter);

        console2.log("Balance Redeemed                    : ", balanceAfter - balanceBefore);
    }

OUTPUT

   ├─ [534] 0xC02aaA39b223FE8D0A0e5C4F27eAD9083C756Cc2::balanceOf(MockMorphoYearnOGWETHStrategy: [0x535B3D7A252fa034Ed71F0C53ec0C6F784cB64E1])
    │   └─ ← [Return] 499500000000000002919 [4.995e20]
    ├─ [0] console::log("STRATEGY BALANCE Before deallocation: ", 0) [staticcall]
    │   └─ ← [Stop]
    ├─ [0] console::log("STRATEGY BALANCE After  deallocation: ", 499500000000000002919 [4.995e20]) [staticcall]
    │   └─ ← [Stop]
    ├─ [0] console::log("Balance Redeemed                    : ", 499500000000000002919 [4.995e20]) [staticcall]
    │   └─ ← [Stop]
    └─ ← [Stop]