# Users can frontrun LSTs/LRTs tokens prices decrease in order to avoid losses

Napier's instant prefundedRedeem lets stakers frontrun eETH/uniETH price drops, redeeming PT/YT at stale value and avoiding losses borne by honest stakers.

- Payout: Contest reward
- Severity: high
- Program: Napier Update
- Credited: zzykxx
- Disclosed: 2024-05-10
- Write-up quality: 7/10
- Original: https://github.com/sherlock-audit/2024-05-napier-update-judging/issues/65
- Library page: https://bugbountylibrary.com/r/sherlock%3A2024-05-napier-update%3AH-2
- Tags: domain:web3 impact:funds-loss kind:contest platform:sherlock sev:high tech:evm technique:race-window vuln:business-logic vuln:oracle-manipulation vuln:reentrancy

**Target:** BaseLSTAdapter prefundedRedeem / Tranche redeemWithYT
**Root cause:** prefundedRedeem pays out ETH instantly at the adapter's current (stale) exchange rate, before an incoming LST/LRT rebase or slashing loss is reflected in the protocol's accounting.
**Steps:**
1. Monitor mempool for EtherFi LiquidityPool `rebase()` calls, or beacon-chain penalties/slashings on Bedrock validators.
2. Frontrun by calling `Tranche::redeemWithYT()` which invokes `BaseLSTAdapter::prefundedRedeem()` for ETH while buffer suffices.
3. For uniETH, atomically call `EigenPod::verifyBalanceUpdates()`/`verifyAndProcessWithdrawals()` after redeeming to trigger the value drop.
4. Re-deposit withdrawn ETH to receive more PT/YT than initially held.
**How found:** Code-reading of prefundedRedeem's instant-withdrawal path combined with knowledge that eETH rebases and uniETH slashing are publicly observable/triggerable, revealing a stale-price window.
**Exploitation:** Attacker watches for an imminent eETH rebase or uniETH slashing/penalty notification, redeems PT/YT for ETH at the pre-drop rate, then lets the loss hit the adapter; for uniETH the drop is triggered atomically in the same tx via EigenPod verify functions, then ETH is redeposited cheaper.
**Insight:** When a vault offers instant redemption against a buffer, check whether the underlying asset's value can change via a permissionless, mempool-visible or self-triggerable call (rebase, slashing verification, fee-charging swap); if so, redemption can be frontrun to dump losses on remaining holders.