58575 sc low operator limit bypass

Submitted on Nov 3rd 2025 at 10:12:47 UTC by @iAfrika for Audit Comp | Alchemix V3arrow-up-right

  • Report ID: #58575

  • Report Type: Smart Contract

  • Report severity: Low

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

  • Impacts:

    • Direct theft of any user funds, whether at-rest or in-motion, other than unclaimed yield

Description

Brief/Intro

A critical vulnerability has been identified in the AlchemistV3 protocol's AlchemistAllocator contract that allows operators to completely bypass intended allocation limits. This vulnerability enables operators to allocate unlimited amounts of funds to strategies, potentially leading to complete protocol insolvency and direct theft of user funds.

Vulnerability Details

oot Cause

The AlchemistAllocator.allocate() and AlchemistAllocator.deallocate() functions contain hardcoded type(uint256).max values instead of properly integrating with the governance-controlled AlchemistStrategyClassifier contract for risk-based limits.

Affected Code

allocate() https://github.com/alchemix-finance/v3-poc/blob/a192ab313c81ba3ab621d9ca1ee000110fbdd1e9/src/AlchemistAllocator.sol#L29-L44

deallocate() https://github.com/alchemix-finance/v3-poc/blob/a192ab313c81ba3ab621d9ca1ee000110fbdd1e9/src/AlchemistAllocator.sol#L51-L66

  1. Missing Governance Integration: Incomplete integration with StrategyClassificationProxy

  2. Hardcoded Maximum Values: Using type(uint256).max renders limit checks completely ineffective

  3. Functional Governance System Ignored: AlchemistStrategyClassifier provides proper risk-based limits but is not utilized

Impact Details

  • Operators can allocate unlimited funds to malicious or high-risk strategies

  • No effective safeguards prevent complete vault drainage

  • Users have no protection against operator abuse

References

Add any relevant links to documentation or code

Proof of Concept

Proof of Concept

OperatorLimitBypass.t.sol

Mitigation

Replace Hard coded limits with governance integration

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