58703 sc insight cached interest rate calculation in peapodseth strategy leads to inaccurate apr apy estimates

Submitted on Nov 4th 2025 at 06:37:48 UTC by @dobrevaleri for Audit Comp | Alchemix V3

• Report ID: #58703

• Report Type: Smart Contract

• Report severity: Insight

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

• Impacts:

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

Description

Brief/Intro

The PeapodsETHStrategy uses Peapods vault's convertToAssets() function to calculate base rates per second for APR/APY estimation. However, this function relies on cached total assets values, while previewRedeem() provides more accurate estimates by simulating interest accrual. This discrepancy leads to consistently inaccurate yield calculations.

Vulnerability Details

The root cause lies in the PeapodsETHStrategy::_computeBaseRatePerSecond() function's reliance on cached interest rate data. The strategy calculates the price per share (PPS) using:

function _computeBaseRatePerSecond() internal override returns (uint256 ratePerSec, uint256 newIndex) {
    uint256 dt = lastSnapshotTime == 0 ? 0 : block.timestamp - lastSnapshotTime;
    
@>  uint256 currentPPS = vault.convertToAssets(1e18);
    newIndex = currentPPS;
    
    if (lastIndex == 0 || dt == 0 || currentPPS <= lastIndex) return (0, newIndex);
    uint256 growth = (currentPPS - lastIndex) * FIXED_POINT_SCALAR / lastIndex;
    ratePerSec = growth / dt;
    return (ratePerSec, newIndex);
}

According to the Peapods vault implementation, convertToAssets() uses a cached conversion rate (_cbr()) with cached _totalAssets, while previewRedeem() uses _previewCbr() which simulates interest accrual to provide current, accurate conversion rates.

The issue affects the entire yield calculation chain:

1. _computeBaseRatePerSecond() returns inaccurate rates due to stale data

2. snapshotYield() uses these rates to calculate APR: uint256 apr = totalRatePerSec * SECONDS_PER_YEAR

3. APY calculations via _approxAPY() compound the inaccuracy

4. These estimates are smoothed and stored in estApr and estApy state variables

The same issue affects the realAssets() function:

function realAssets() external view override returns (uint256) {
    return vault.convertToAssets(vault.balanceOf(address(this)));  // Uses cached values
}

Impact Details

The strategy's estApr and estApy values will not reflect the actual current yield performance.

References

https://github.com/peapodsfinance/contracts/blob/main/contracts/LendingAssetVault.sol

Proof of Concept

Proof of Concept

// SPDX-License-Identifier: MIT
pragma solidity 0.8.28;

import "forge-std/Test.sol";
import "forge-std/console.sol";
import {PeapodsETHStrategy} from "../strategies/mainnet/PeapodsETH.sol";
import {IMYTStrategy} from "../interfaces/IMYTStrategy.sol";
import {IERC4626} from "../../lib/openzeppelin-contracts/contracts/interfaces/IERC4626.sol";
import {IERC20} from "../../lib/openzeppelin-contracts/contracts/token/ERC20/IERC20.sol";

contract PoC_PeapodsETH_ConvertToAssets_vs_PreviewRedeem_Simple is Test {
    address public constant PEAPODS_ETH_VAULT = 0x9a42e1bEA03154c758BeC4866ec5AD214D4F2191;
    address public constant WETH = 0xC02aaA39b223FE8D0A0e5C4F27eAD9083C756Cc2;
    address public constant PERMIT2 = 0x000000000022d473030f1dF7Fa9381e04776c7c5;

    PeapodsETHStrategy public strategy;
    IERC4626 public vault;
    uint256 public mainnetFork;

    function setUp() public {
        string memory rpc = vm.envOr("MAINNET_RPC_URL", string("https://ethereum.llamarpc.com"));
        mainnetFork = vm.createFork(rpc);
        vm.selectFork(mainnetFork);

        vault = IERC4626(PEAPODS_ETH_VAULT);

        IMYTStrategy.StrategyParams memory params = IMYTStrategy.StrategyParams({
            owner: address(this),
            name: "PeapodsETH",
            protocol: "PeapodsETH",
            riskClass: IMYTStrategy.RiskClass.HIGH,
            cap: 10_000e18,
            globalCap: 1e18,
            estimatedYield: 100e18,
            additionalIncentives: false,
            slippageBPS: 1
        });

        strategy = new PeapodsETHStrategy(address(0xBEEF), params, PEAPODS_ETH_VAULT, WETH, PERMIT2);
        strategy.setWhitelistedAllocator(address(0xBEEF), true);
    }

    function test_PoC_vaultDirectComparison() public {
        // Test the vault functions directly without strategy wrapper
        uint256 testAmount = 5e18;
        address user = address(0x9999);

        deal(WETH, user, testAmount);
        vm.startPrank(user);
        IERC20(WETH).approve(PEAPODS_ETH_VAULT, testAmount);
        uint256 shares = vault.deposit(testAmount, user);
        vm.stopPrank();

        console.log("=== DIRECT VAULT TEST ===");
        console.log("Deposited:", testAmount);
        console.log("Shares received:", shares);

        // Immediate comparison
        uint256 convertToAssets = vault.convertToAssets(shares);
        uint256 previewRedeem = vault.previewRedeem(shares);
        console.log("Immediate convertToAssets:", convertToAssets);
        console.log("Immediate previewRedeem:", previewRedeem);
        console.log("Immediate difference:", int256(previewRedeem) - int256(convertToAssets));

        // After time
        vm.warp(block.timestamp + 7 days);

        convertToAssets = vault.convertToAssets(shares);
        previewRedeem = vault.previewRedeem(shares);
        console.log("After 7 days convertToAssets:", convertToAssets);
        console.log("After 7 days previewRedeem:", previewRedeem);
        console.log("After 7 days difference:", int256(previewRedeem) - int256(convertToAssets));

        // Test actual redemption to see which was more accurate
        vm.prank(user);
        uint256 actualAssets = vault.redeem(shares, user, user);
        console.log("Actual redeemed assets:", actualAssets);
        console.log("convertToAssets error:", int256(actualAssets) - int256(convertToAssets));
        console.log("previewRedeem error:", int256(actualAssets) - int256(previewRedeem));
    }
}