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Performance and management fee updates may technically still apply to already earned interest

Low/InfoMorpho Vault V2·Blackthorn · Curated yield vaults · 13th August, 2025CodebaseL-1

Summary

Due to the max rate mechanism, interest earned will be capped by the max rate. Thus, even if the past interest is accrued as per the rate before changing the fees, the actual interest earned that will be attributed to the Vault over time will use the new rate, but it corresponds to deposits made with the old rate.

Vulnerability Detail

VaultV2::setPerformanceFee() correctly accrues interest first, and only changes the fee afterwards, link. However, note that the interest accrued is capped by the max rate, link. This means that the pending interest earned while the old rate was active will be now applied the new rate.

Impact

Under/over charging fees.

Code Snippet

https://github.com/sherlock-audit/2025-08-morpho-vault-v2-aug-13th/pull/25/files#diff-b9b86210e027003894f79227889d79167f92c0aa2b2a1b0291f4606002e22540R406

https://github.com/sherlock-audit/2025-08-morpho-vault-v2-aug-13th/pull/25/files#diff-b9b86210e027003894f79227889d79167f92c0aa2b2a1b0291f4606002e22540R584

Tool Used

Manual Review

Recommendation

There are ways to fix this but not quite trivial.