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Mitigation of H-06: Issue not mitigated

Link to Issue: code-423n4/2023-03-asymmetry-findings#588

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Issue H-06 describes the potential problems of assuming a peg of stETH to ETH. The sponsor proposed a mitigation to fetch the price of stETH using a Chainlink price feed.

While the main idea of using Chainlink as the price oracle instead of assuming a 1:1 peg is ok, there is an error in the mitigation as the change misses a critical place where the peg is still assumed. This error is described below.

There is also new issue introduced with the usage of Chainlink, which is described in a separate report ([adriro-NEW-H-02])

Technical Details

The proposed pull request changes the implementation of the ethPerDerivative() function to fetch the stETH price using Chainlink. However, as we can see in the following snippet, the withdraw() function is still assuming a peg of stETH to ETH:

https://github.com/asymmetryfinance/smart-contracts/pull/242/files#diff-ac281bf63004ef9a825c084018c54f10b03233cd4f286398f5d5e993612308b5R60-R71

function withdraw(uint256 _amount) external onlyOwner {
    IWStETH(WST_ETH).unwrap(_amount);
    uint256 stEthBal = IERC20(STETH_TOKEN).balanceOf(address(this));
    IERC20(STETH_TOKEN).approve(LIDO_CRV_POOL, stEthBal);
    uint256 minOut = (stEthBal * (10 ** 18 - maxSlippage)) / 10 ** 18;
    IStEthEthPool(LIDO_CRV_POOL).exchange(1, 0, stEthBal, minOut);
    // solhint-disable-next-line
    (bool sent, ) = address(msg.sender).call{value: address(this).balance}(
        ""
    );
    require(sent, "Failed to send Ether");
}

The calculation of minOut is applying the slippage directly to the stEthBal variable, which is the stETH amount. This means that this calculation is assuming a 1:1 peg (see original report in H-06 for a more detailed explanation).

Impact

High. The conditions in the original report for H-06 still apply. If stETH trades below the defined slippage, the withdraw() will revert as the minOut will always be above the current price, DoSing the protocol.

Recommendation

The calculation for minOut should take into account the current price of stETH, which can now be fetched using ethPerDerivative().