> Well, knowing what we know from step 5, a clever trader realizes that if they do all of the above, and then borrow some yUSD (say $8m) and just donate it to t

> Well, knowing what we know from step 5, a clever trader realizes that if they do all of the above, and then borrow some yUSD (say $8m) and just donate it to the yUSDVault, when Cream goes to calculate how much cryUSDVault is worth, it will have immediately doubled in value, because some generous donor has just doubled the balance of yUSD owned by yUSDVault (and doubling the borrowing power of cryUSDVault in the process). So if you had flash borrowed a bunch of cryUSDVault (say $1.5b) against flash borrowed collateral (say $2b of ETH), you just now managed to double the value of your loaned assets to $3b but you’ve only posted $2b of collateral. It's wild that markets can be manipulated inside essentially an uncommitted transaction.