Shadow Arena #012: Lybra Finance V2

Lybra V2 is a Liquity-architecture-adjacent CDP, but the collateral is stETH and the rebase makes everything harder. The protocol issues eUSD against LSD collateral (stETH, wstETH, rETH, wbETH) with CR-gated mint/burn/liquidate/redeem flows that mirror Liquity invariants, plus a non-rebasing peUSD twin for cross-chain use. The Code4rena audit found 31 unique High and Medium vulnerabilities in 1,762 SLOC — the densest finding-per-LoC ratio of any of the Liquity-family forks. The lesson: you built single-collateral ETH Liquity V1. What happens when you swap in stETH and the collateral itself silently rebases under you? Every assumption the Stability Pool's P/S decay made about a non-rebasing balance breaks, every share-vs-supply invariant gets a new attacker path, and the rigidRedemption primitive (Lybra's redeemCollateral analogue) ends up using a different collateral ratio formula than liquidate. (License footnote: the Code4rena snapshot does not contain a top-level LICENSE file. Upstream LybraV2 must be checked before publishing the Shadow Arena fork — the public audit grants reproduction rights for educational use of the findings themselves.)

Scope (1762 SLOC)

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