Investigation findings:
- VWAP WAS being fed during buy-only cycles (shouldRecordVWAP = true on ETH inflow / price rising).
Over 80 buy-recenter cycles VWAP converged toward the inflated current price.
- When VWAP ≈ currentTick, mirrorTick = currentTick + vwapDistance ≈ currentTick, placing
the floor near the inflated price. Adversary sells back through the high floor, extracting
nearly all LM ETH.
- Optimizer parameters (anchorShare, CI) were not the primary cause.
Fix (LiquidityManager.sol):
Flip shouldRecordVWAP from buy direction to sell direction. VWAP is now recorded only when
price falls (ETH outflow / sell events) or at initial bootstrap (cumulativeVolume == 0).
Buy-only attack cycles leave VWAP frozen at the historical baseline, keeping mirrorTick and
the floor conservatively anchored far from the inflated current price.
Also updated onchain/AGENTS.md to document the corrected recording direction.
Regression test (VWAPFloorProtection.t.sol):
- test_vwapNotInflatedByBuyOnlyAttack: asserts getVWAP() stays at bootstrap after N buy cycles.
- test_floorConservativeAfterBuyOnlyAttack: asserts floor center is far below inflated tick.
- test_vwapBootstrapsOnFirstFeeEvent: confirms bootstrap path unchanged.
- test_recenterSucceedsOnSellDirectionWithoutReverts: confirms sell-direction recenters work.
All 187 tests pass.
Co-Authored-By: Claude Sonnet 4.6 <noreply@anthropic.com>
