Submitted by Fitro, also found by grearlake, nuthan2x, and Samueltroydomi
https://github.com/code-423n4/2025-03-silo-finance/blob/0409be5b85d7aabfbbe10de1de1890d4b862d2d5/silo-vaults/contracts/SiloVault.sol#L252-L267
https://github.com/code-423n4/2025-03-silo-finance/blob/0409be5b85d7aabfbbe10de1de1890d4b862d2d5/silo-vaults/contracts/SiloVault.sol#L272
https://github.com/code-423n4/2025-03-silo-finance/blob/0409be5b85d7aabfbbe10de1de1890d4b862d2d5/silo-vaults/contracts/libraries/SiloVaultActionsLib.sol#L29-L65
https://github.com/code-423n4/2025-03-silo-finance/blob/0409be5b85d7aabfbbe10de1de1890d4b862d2d5/silo-vaults/contracts/SiloVault.sol#L329
To remove a market from the vault, the supply cap must be set to 0. However, when this happens, the markets allowance to use tokens from the vault is also reset to 0. The issue arises because some tokens revert when attempting to approve a 0 value, preventing these markets from being removed from the vault.
submitMarketRemoval() is implemented as follows.
As you can see, removing a market requires setting the cap to 0 (the same applies to updateWithdrawQueue().). This is done by calling submitCap() with _newSupplyCap set to 0.
In this case, the execution will enter the if section, which calls _setCap(), which invokes setCap() from the SiloVaultActionsLib.
As you can see, we do not enter the if block because _supplyCap = 0, which results in approveValue = 0 (default value). This is expected since we want to clear the markets allowance. However, some assets (such as BNB) revert when the approval value is set to 0, causing forceApprove() to fail.  
As a result, the cap cannot be set to 0, preventing the market from being removed. Furthermore, if the vault relies on markets with such assets and they cannot be removed, new ones cannot be added due to the MAX_QUEUE_LENGTH restriction.
In this case, forceApprove() will not resolve the issue because it is only useful for tokens that revert when the previous allowance is not set to zero. It does not address tokens that revert due to 0 approval amounts.
As you can see, if the initial approval call fails, the function first resets the allowance to zero and then attempts to approve the provided value again. However, since the value is 0, it will fail another time reverting the transaction.  
According to the contest specifications, tokens that Revert on zero value approvals are explicitly within scope.
To resolve this issue, approveValue can be set to 1 instead of leaving it at the default uint256 value.
IhorSF (Silo Finance) confirmed
Silo Finance mitigated:
Status: Mitigation confirmed. Full details in reports from d3e4, t0x1c, and Drynooo.
