Description

The first seed deposit into the lov vault is priced at a 1:1 ratio regardless of the current Dai/USDC price.

function _reservesToShares(Cache memory cache, uint256 reserves) private view returns (uint256) {
if (cache.totalSupply == 0) {
	return reserves;
}

However, when this seed deposit is removed, it is affected by the current userRedeemableReserves, which is impacted by the current Dai/USDC price provided by the oracle.

Impact

As a result, the withdrawal of the seed deposit could cause a loss of reserves for other users as the initial deposit is better priced than the market rate. Alternatively, it could cause a loss for the initial deposit, which received a worse rate than the market rate.

Recommendations

Ensure that the initial deposit will not be removed.

Remediation

The TempleDAO team has ensured that the initial deposit will not be removed.