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I am auditing a protocol that creates a token yETH representing a basket of liquid staking tokens such as rETH and stETH. I noticed that the protocol treats yETH as if it is 1:1 with ETH when it's very possible it won't be. What kind of problems can result from this? it seems like it could be manipulated.

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    I think it depends on where it treats the value of yETH as 1:1 with eth. Is it when users are exchanging yETH for ETH? Somewhere else? Generally if you had a hack on one of the index basket's protocols the overall yETH would drop (If that liquid staking token can't be exchanged for ETH anymore), but I guess the effects depend a lot of what logic is done with this yETH to ETH assumption right? Is it critical/dangerous functionality like exchanging tokens, or something less significant like predicting uniswap swap outcomes? The effects could vary a lot I think.
    – Bruce
    Commented Sep 19, 2023 at 3:01

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