# The amount of xezETH in circulation will not represent the amount of ezETH tokens 1:1

xezETH minted on L2 at deposit-time valuation but ezETH minted on L1 at sweep-time valuation, so lockbox 1:1 redemption leaves unbacked xezETH.

- Payout: Contest reward
- Severity: high
- Program: Renzo
- Credited: zzykxx
- Disclosed: 2024-06-07
- Write-up quality: 6/10
- Original: https://github.com/code-423n4/2024-04-renzo-findings/issues/145
- Library page: https://bugbountylibrary.com/r/c4%3A2024-04-renzo%3AH-06
- Tags: domain:web3 impact:funds-loss kind:contest platform:code4rena sev:high tech:evm tech:solidity technique:chained technique:source-review vuln:accounting-error vuln:business-logic vuln:oracle-manipulation

**Target:** L2 xRenzoDeposit / L1 xRenzoBridge cross-chain mint bridge
**Root cause:** xezETH is minted on L2 at the current ezETH rate, but the corresponding ezETH is minted on L1 at sweep time using a later rate; XERC20Lockbox::withdraw always redeems 1:1, so circulating xezETH can exceed backing ezETH.
**Steps:**
1. Alice calls `xRenzoDeposit::deposit()` on L2 with 1 ETH when ezETH rate is 1 ETH, receiving 1 xezETH.
2. ezETH valuation rises to 2 ETH.
3. Sweeper calls `xRenzoDeposit::sweep()`; funds bridge via Connext to L1.
4. Connext calls `xRenzoBridge::xReceive()`, which deposits 1 ETH via `RestakeManager::depositETH()`, minting only 0.5 ezETH.
5. 5 ezETH locked in lockbox, 0.5 xezETH minted and burned; Alice's 1 xezETH now only 0.5 redeemable, remainder worthless.
**How found:** Code-reading of the two-step cross-chain mint flow: noticed xezETH minted at deposit-time rate on L2 vs ezETH minted at sweep-time rate on L1, while lockbox redemption is fixed 1:1.
**Exploitation:** No active attack; discrepancy accrues over time as ezETH rate rises between L2 mint and L1 sweep, leaving unbacked xezETH that cannot be redeemed 1:1.
**Escalation:** Discrepancy grows with time and rate drift; MaxTVL blocking L1 deposits can worsen accumulation of L2-minted tokens.
**Insight:** In cross-chain mint/bridge designs, check whether the share/rate used at source-chain mint equals the rate used at destination-chain mint; any time gap plus a 1:1 redemption path creates unbacked liabilities.