Skip to content
Request an audit

‹ All findings

Compounding shares will overtime get less rewards than non compounding shares

MediumClip Finance Strategy Upgrade·by the Three Sigma team·DeFi infrastructure·15th March 20243S-Clip-M01

Report PageSource

Description

keepPortion and sellPortion are based on the total number of shares of each type. However, compoundShareRate is expected to increase due to accumulating rewards.

This means that, for compounding shares, the same liquidity minted compared to non compounding shares will lead to less shares, when depositing.

Thus, over time, assuming equal deposits of compounding and non compounding shares, the total supply of non compounding shares is expected to grow more than compounding shares.

Recommendation

keepPortion and sellPortion should be calculated based on the total liquidity of each share type, not the total supply, as liquidity is effectively what is generating rewards.

Status

Addressed in #2464036.

Found during Three Sigma’s team review · 0xSimao on the review team