> For the complete documentation index, see [llms.txt](https://reports.immunefi.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://reports.immunefi.com/alchemix-v3/58768-sc-high-mytsharesdeposited-is-not-updated-during-liquidations-breaking-core-accounting.md). # 58768 sc high mytsharesdeposited is not updated during liquidations breaking core accounting **Submitted on Nov 4th 2025 at 12:38:53 UTC by @auditagent for** [**Audit Comp | Alchemix V3**](https://immunefi.com/audit-competition/alchemix-v3-audit-competition) * **Report ID:** #58768 * **Report Type:** Smart Contract * **Report severity:** High * **Target:** * **Impacts:** * Protocol insolvency ## Description ## Brief/Intro The `_mytSharesDeposited` state variable is intended to track the total amount of `myt` tokens held by the `AlchemistV3` contract. However, during the liquidation process, `myt` tokens are transferred out, but the `_mytSharesDeposited` variable is never decremented to reflect this outflow. This occurs in both the `_forceRepay` and `_doLiquidation` ## Vulnerability Details `_mytSharesDeposited` feeds both `depositCap` enforcement and TVL via `_getTotalUnderlyingValue()`. When `MYT` exits the contract without decrementing this counter, TVL and cap appear higher than reality. ```solidity function _forceRepay(uint256 accountId, uint256 amount) internal returns (uint256) { // ... if (account.collateralBalance > protocolFeeTotal) { account.collateralBalance -= protocolFeeTotal; // Transfer the protocol fee to the protocol fee receiver TokenUtils.safeTransfer(myt, protocolFeeReceiver, protocolFeeTotal); // myt transferred out } if (creditToYield > 0) { // Transfer the repaid tokens from the account to the transmuter. TokenUtils.safeTransfer(myt, address(transmuter), creditToYield); // myt transferredout // @audit: `_mytSharesDeposited` is not decremented for MYT transferred out } return creditToYield; } ``` ```solidity function _doLiquidation(...) internal returns (...) { // ... // send liquidation amount - fee to transmuter TokenUtils.safeTransfer(myt, transmuter, amountLiquidated - feeInYield); // myt transferred out // send base fee to liquidator if available if (feeInYield > 0 && account.collateralBalance >= feeInYield) { TokenUtils.safeTransfer(myt, msg.sender, feeInYield); // myt transferred out // @audit: `_mytSharesDeposited` is not decremented for MYT transferred out } // ... } ``` ## Root cause * In `_forceRepay`, `MYT` is sent to the transmuter and the protocol fee receiver, but `_mytSharesDeposited` is never decremented by those outflows. * In \_doLiquidation, MYT is sent to the transmuter and to the liquidator, but `_mytSharesDeposited` is not decremented. * Other flows correctly update the counter. ## Impact Details * `_getTotalUnderlyingValue()` overstates collateral. ## References * AlchemistV3::\_doLiquidation: * AlchemistV3::\_forceRepay: ## Proof of Concept ## Proof of Concept Add the following test in `src/test/AlchemistV3.t.sol` and run using `forge test --match-test test_mismatch` ```solidity function test_mismatch() external { uint256 depositAmount = 1_000e18; vm.startPrank(address(0xbeef)); SafeERC20.safeApprove(address(vault), address(alchemist), depositAmount); alchemist.deposit(depositAmount, address(0xbeef), 0); uint256 tokenId = AlchemistNFTHelper.getFirstTokenId(address(0xbeef), address(alchemistNFT)); alchemist.mint(tokenId, alchemist.totalValue(tokenId) * FIXED_POINT_SCALAR / minimumCollateralization, address(0xbeef)); vm.stopPrank(); uint256 initialVaultSupply = IERC20(address(mockStrategyYieldToken)).totalSupply(); uint256 modifiedVaultSupply = (initialVaultSupply * 7000 / 10_000) + initialVaultSupply; IMockYieldToken(mockStrategyYieldToken).updateMockTokenSupply(modifiedVaultSupply); vm.startPrank(externalUser); alchemist.liquidate(tokenId); vm.stopPrank(); uint256 shares = IERC20(address(vault)).balanceOf(address(alchemist)); // @audit: TVL derived from _mytSharesDeposited should equal underlyingFromShares but they are not assertNotEq(alchemist.getTotalUnderlyingValue(), alchemist.convertYieldTokensToUnderlying(shares)); } ``` --- # Agent Instructions This documentation is published with GitBook. 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