diff --git a/contracts/contracts/vault/OETHVaultCore.sol b/contracts/contracts/vault/OETHVaultCore.sol
index 001a7251a0..839606f04a 100644
--- a/contracts/contracts/vault/OETHVaultCore.sol
+++ b/contracts/contracts/vault/OETHVaultCore.sol
@@ -398,40 +398,20 @@ contract OETHVaultCore is VaultCore {
         uint256 wethAvailableInVault = _wethAvailable();
         // Nothing in vault to allocate
         if (wethAvailableInVault == 0) return;
-        uint256 strategiesValue = _totalValueInStrategies();
-        // We have a method that does the same as this, gas optimisation
-        uint256 calculatedTotalValue = wethAvailableInVault + strategiesValue;
-
-        // We want to maintain a buffer on the Vault so calculate a percentage
-        // modifier to multiply each amount being allocated by to enforce the
-        // vault buffer
-        uint256 vaultBufferModifier;
-        if (strategiesValue == 0) {
-            // Nothing in Strategies, allocate 100% minus the vault buffer to
-            // strategies
-            vaultBufferModifier = uint256(1e18) - vaultBuffer;
-        } else {
-            vaultBufferModifier =
-                (vaultBuffer * calculatedTotalValue) /
-                wethAvailableInVault;
-            if (1e18 > vaultBufferModifier) {
-                // E.g. 1e18 - (1e17 * 10e18)/5e18 = 8e17
-                // (5e18 * 8e17) / 1e18 = 4e18 allocated from Vault
-                vaultBufferModifier = uint256(1e18) - vaultBufferModifier;
-            } else {
-                // We need to let the buffer fill
-                return;
-            }
-        }
-        if (vaultBufferModifier == 0) return;
 
-        uint256 allocateAmount = wethAvailableInVault.mulTruncate(
-            vaultBufferModifier
-        );
+        // Calculate the target buffer for the vault using the total supply
+        uint256 totalSupply = oUSD.totalSupply();
+        uint256 targetBuffer = totalSupply.mulTruncate(vaultBuffer);
+
+        // If available WETH in the Vault is below the target buffer then there's nothing to allocate
+        if (wethAvailableInVault <= targetBuffer) return;
+
+        // The amount of assets to allocate to the default strategy
+        uint256 allocateAmount = wethAvailableInVault - targetBuffer;
 
         address depositStrategyAddr = assetDefaultStrategies[weth];
 
-        if (depositStrategyAddr != address(0) && allocateAmount > 0) {
+        if (depositStrategyAddr != address(0)) {
             IStrategy strategy = IStrategy(depositStrategyAddr);
             // Transfer asset to Strategy and call deposit method to
             // mint or take required action
diff --git a/contracts/test/vault/oeth-vault.js b/contracts/test/vault/oeth-vault.js
index f421f68337..bf7c992d30 100644
--- a/contracts/test/vault/oeth-vault.js
+++ b/contracts/test/vault/oeth-vault.js
@@ -1306,6 +1306,7 @@ describe("OETH Vault", function () {
         await oethVault.connect(governor).setVaultBuffer(oethUnits("0.01"));
 
         // Have 4 + 12 + 16 = 32 WETH outstanding requests
+        // So a total supply of 100 - 32 = 68 OETH
         await oethVault.connect(daniel).requestWithdrawal(oethUnits("4"));
         await oethVault.connect(josh).requestWithdrawal(oethUnits("12"));
         await oethVault.connect(matt).requestWithdrawal(oethUnits("16"));
@@ -1498,7 +1499,7 @@ describe("OETH Vault", function () {
           await expect(tx).to.not.emit(oethVault, "AssetAllocated");
         });
       });
-      describe("when mint more than covers outstanding requests and vault buffer (17 + 1 + 3 WETH)", () => {
+      describe("when mint more than covers outstanding requests and vault buffer (17 + 1 + 3 = 21 OETH)", () => {
         beforeEach(async () => {
           const { oethVault, daniel, weth } = fixture;
           await oethVault
@@ -1545,15 +1546,20 @@ describe("OETH Vault", function () {
 
           const tx = await oethVault.connect(domen).allocate();
 
-          await expect(tx).to.emit(oethVault, "AssetAllocated");
+          // total supply is 68 starting + 21 minted = 89 OETH
+          // Vault buffer is 1% of 89 = 0.89 WETH
+          // WETH transfer amount = 4 WETH available in vault - 0.89 WETH buffer = 3.11 WETH
+          await expect(tx)
+            .to.emit(oethVault, "AssetAllocated")
+            .withArgs(weth.address, mockStrategy.address, oethUnits("3.11"));
 
-          expect(
-            await weth.balanceOf(oethVault.address)
-          ).to.approxEqualTolerance(vaultBalance.sub(oethUnits("3")), 5);
+          expect(await weth.balanceOf(oethVault.address)).to.eq(
+            vaultBalance.sub(oethUnits("3.11"))
+          );
 
-          expect(
-            await weth.balanceOf(mockStrategy.address)
-          ).to.approxEqualTolerance(stratBalance.add(oethUnits("3")), 5);
+          expect(await weth.balanceOf(mockStrategy.address)).to.eq(
+            stratBalance.add(oethUnits("3.11"))
+          );
         });
       });
     });