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Reproduced Exploit

FeeManager miscalculates performance fees — AuditVault synthetic reduction

This bug report discusses an issue found in the performance fee calculation of the Mellow Flexible Vaults protocol. The current formula used in the FeeManager.calculateFee function is incorrect and leads to incorrect fee calculations. The root cause of the issue is that the formula assumes that the…

Jul 2025•Other•logic•3 min read

Chain

Other

Category

logic

Date

Jul 2025

Source

AuditVault

PoC & write-upPoC for your local evm-hack-analyzerAuditVault PoCs

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Source & credit. Reproduction of a public audit finding curated by AuditVault — the original finding: 62110-h-5-incorrect-performance-fee-calculation-in-feemanager-sher. Standalone Foundry PoC and full write-up: 62110-h-5-incorrect-performance-fee-calculation-in-feemanager-sher_exp in the evm-hack-registry mirror.

Vulnerability classes: vuln/logic/fee-calculation · vuln/arithmetic/precision-loss

Reproduction: self-contained Foundry PoC with an offline synthetic contract. Full trace: output.txt.

AuditVault finding: 62110 · H-5: Incorrect performance fee calculation in FeeManager``

Key info#

ImpactHIGH — FeeManager miscalculates performance fees
Protocol[[Mellow]] Flexible Vaults
FindingAuditVault #62110
Reporthttps://github.com/sherlock-audit/2025-07-mellow-flexible-vaults-judging
SourceAuditVault finding
Compiler^0.8.24 (synthetic reduction)
LossReduced invariant reproduced; no live funds moved
Attacker EOAConfigured synthetic caller
Attack contractExploit
Attack txLocal Foundry Exploit.attack() call
Chain · block · dateEthereum model · block 1 · synthetic
Vulnerable contractLocal synthetic vulnerable contract in test/
Bug classSee vulnerability-class tags above

TL;DR#

This bug report discusses an issue found in the performance fee calculation of the Mellow Flexible Vaults protocol. The current formula used in the FeeManager.calculateFee function is incorrect and leads to incorrect fee calculations. The root cause of the issue is that the formula assumes that the price difference can be directly multiplied by the total shares, which is not the case. This can result in incorrect performance fee calculations. The report also includes a suggested correction to the formula to properly convert the price difference to share amounts. The protocol team has fixed this issue in their code.

Background#

The upstream report is a Solidity finding. This page keeps the vulnerable statement and demonstrates its security consequence in a small, deterministic EVM model; no live RPC or external dependencies are required.

The vulnerable code#

SOLIDITY
// The exact vulnerable pattern is retained in test/62110-h-5-incorrect-performance-fee-calculation-in-feemanager-sher.sol.
// @> see the marked statement in the synthetic reduction

Root cause#

The caller-controlled input or stale state is trusted before the required uniqueness, bounds, authorization, accounting, or reentrancy invariant is enforced. The marked line in the synthetic contract intentionally preserves that ordering so the assertion is executable.

Preconditions#

  • The vulnerable contract is deployed with the state described by the report.
  • The attacker can reach the affected entry point (or submit the report's crafted input).

Attack walkthrough#

  1. Exploit.run() initializes the minimal state from the report.
  2. The marked vulnerable operation executes without its required check.
  3. The contract records the resulting invariant violation and emits a Proof event.
  4. The test asserts the harm; the passing trace is recorded at output.txt:4.

Diagrams#

flowchart TD A[Attacker supplies crafted input] --> B[Vulnerable operation] B --> C{Missing invariant check} C --> D[Security impact demonstrated]
sequenceDiagram participant A as Attacker participant V as Vulnerable contract participant S as State A->>V: invoke affected entry point V->>S: apply unchecked update S-->>A: harm is observable

Remediation#

Apply the invariant before mutating state: accrue interest before adding principal; reject duplicate signers; use checked casts and bounded lengths; validate token/target/DAO identities; use nonReentrant; enforce slippage and fee equality; and validate the canonical authority or ownership relationship described by the report.

How to reproduce#

BASH
cd evm-hack-registry/62110-h-5-incorrect-performance-fee-calculation-in-feemanager-sher_exp
forge test -vvvvv

The test is offline and uses only the shared forge-std library. The corresponding Playground bundle is generated from scripts/poc-configs/62110-h-5-incorrect-performance-fee-calculation-in-feemanager-sher.mjs.

Sources#

Reference: https://github.com/sherlock-audit/2025-07-mellow-flexible-vaults-judging

Sources & further analysis#

Reproductions & code

Alerts & third-party analyses

  • Web3Sec X hacked database: search.
  • Rekt leaderboard: search.
  • Solodit incident search: search.

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