Submitted by t0x1c, also found by Drynooo
https://github.com/code-423n4/2025-03-silo-finance/blob/main/silo-vaults/contracts/SiloVault.sol#L976-L992
The current implementation distributes rewards before minting fee shares, resulting in the fee recipient receiving shares but no rewards for the corresponding interest accrual period. This creates an inconsistency where the exisiting share owners receive higher than deserved portion of rewards.
Lets assume Bob is the sole shareholder. Whats happening right now is:
What this means is that the fee recipient is going to be minted the feeShares currently because they have a rightful claim to the feeAssets which started to accrue right from timestamp t.
With that in mind, lets see the remaining steps -
In this case however, what it means is that the entire reward is doled out to Bob since he possesses 100% of shares because the feeShares are yet to be minted. By the time the control reaches the second call to _claimRewards() on L499 after minting of these shares, there are no more rewards left to be distributed to the fee recipient.
The current logic of calling _claimRewards() from inside _update() is correct and works well for all the other cases, so no issues there. For cases where feeShares are being minted, however, we may need to introduce additional logic inside _claimRewards() which checks for this via a new flag and calculates the reward portion after accounting for these retrospectively minted feeShares.
 edd (Silo Finance) acknowledged
