Submitted by Limbooo, also found by Bigsam
https://github.com/code-423n4/2024-03-ondo-finance/blob/78779c30bebfd46e6f416b03066c55d587e8b30b/contracts/ousg/ousgInstantManager.sol#L426-L429 
https://github.com/code-423n4/2024-03-ondo-finance/blob/78779c30bebfd46e6f416b03066c55d587e8b30b/contracts/ousg/ousgInstantManager.sol#L460
The OUSG Instant Redemption Manager contract contains an oversight in its redeem function, specifically in the handling of BUIDL redemption limits. This oversight can potentially lead to failed redemption attempts when the redemption balance exceeds the BUIDL balance held by the manager contract while it has a right amount if its concatenated with USDC amount left by another redemption process. The impact of this issue is significant as it affects the usability of the redemption feature and can result in user frustration and loss of trust in the system.
The following POC demonstrates the issue. Use it as part of forge-tests/ousg/OUSGInstantManager/redeem.t.sol file.
Run using this command:
Foundry
To address this issue, the OUSG Instant Redemption Manager contract should implement a mechanism to ensure that redemption requests do not exceed the available BUIDL balance held by the manager contract. This can be achieved by incorporating proper checks and balances in the redemption process, such as verifying the BUIDL balance before processing redemption requests and adjusting the redemption amount accordingly. Additionally, consider an redeem implementation that concatenate the balance of remaining USDC amount with the BUIDL redeemed balance if the corresponding USDC amount or redeem amount of OUSG is more than minBUIDLRedeemAmount.
Error
cameronclifton (Ondo) confirmed and commented:
Note: For full discussion, see here.
