simp only [replace]
D : Type
I : Interpretation D
V' : VarAssignment D
E : Env
c : Char
τ : PredName → ℕ → Option (List VarName × Formula)
phi psi : Formula
phi_ih :
  ∀ (V : VarAssignment D) (binders : Finset VarName),
    admitsAux τ binders phi →
      (∀ x ∉ binders, V' x = V x) →
        (Holds D
            { nonempty := ⋯, pred_const_ := I.pred_const_,
              pred_var_ := fun X ds =>
                let opt := τ X ds.length;
                if h : opt.isSome = true then
                  let val := opt.get h;
                  let zs := val.1;
                  let H := val.2;
                  if ds.length = zs.length then Holds D I (Function.updateListITE V' zs ds) E H else I.pred_var_ X ds
                else I.pred_var_ X ds }
            V E phi ↔
          Holds D I V E (replace c τ phi))
psi_ih :
  ∀ (V : VarAssignment D) (binders : Finset VarName),
    admitsAux τ binders psi →
      (∀ x ∉ binders, V' x = V x) →
        (Holds D
            { nonempty := ⋯, pred_const_ := I.pred_const_,
              pred_var_ := fun X ds =>
                let opt := τ X ds.length;
                if h : opt.isSome = true then
                  let val := opt.get h;
                  let zs := val.1;
                  let H := val.2;
                  if ds.length = zs.length then Holds D I (Function.updateListITE V' zs ds) E H else I.pred_var_ X ds
                else I.pred_var_ X ds }
            V E psi ↔
          Holds D I V E (replace c τ psi))
V : VarAssignment D
binders : Finset VarName
h1 : admitsAux τ binders phi ∧ admitsAux τ binders psi
h2 : ∀ x ∉ binders, V' x = V x
⊢ Holds D
      { nonempty := ⋯, pred_const_ := I.pred_const_,
        pred_var_ := fun X ds =>
          let opt := τ X ds.length;
          if h : opt.isSome = true then
            let val := opt.get h;
            let zs := val.1;
            let H := val.2;
            if ds.length = zs.length then Holds D I (Function.updateListITE V' zs ds) E H else I.pred_var_ X ds
          else I.pred_var_ X ds }
      V E (phi.iff_ psi) ↔
    Holds D I V E (replace c τ (phi.iff_ psi))
D : Type
I : Interpretation D
V' : VarAssignment D
E : Env
c : Char
τ : PredName → ℕ → Option (List VarName × Formula)
phi psi : Formula
phi_ih :
  ∀ (V : VarAssignment D) (binders : Finset VarName),
    admitsAux τ binders phi →
      (∀ x ∉ binders, V' x = V x) →
        (Holds D
            { nonempty := ⋯, pred_const_ := I.pred_const_,
              pred_var_ := fun X ds =>
                let opt := τ X ds.length;
                if h : opt.isSome = true then
                  let val := opt.get h;
                  let zs := val.1;
                  let H := val.2;
                  if ds.length = zs.length then Holds D I (Function.updateListITE V' zs ds) E H else I.pred_var_ X ds
                else I.pred_var_ X ds }
            V E phi ↔
          Holds D I V E (replace c τ phi))
psi_ih :
  ∀ (V : VarAssignment D) (binders : Finset VarName),
    admitsAux τ binders psi →
      (∀ x ∉ binders, V' x = V x) →
        (Holds D
            { nonempty := ⋯, pred_const_ := I.pred_const_,
              pred_var_ := fun X ds =>
                let opt := τ X ds.length;
                if h : opt.isSome = true then
                  let val := opt.get h;
                  let zs := val.1;
                  let H := val.2;
                  if ds.length = zs.length then Holds D I (Function.updateListITE V' zs ds) E H else I.pred_var_ X ds
                else I.pred_var_ X ds }
            V E psi ↔
          Holds D I V E (replace c τ psi))
V : VarAssignment D
binders : Finset VarName
h1 : admitsAux τ binders phi ∧ admitsAux τ binders psi
h2 : ∀ x ∉ binders, V' x = V x
⊢ Holds D
      { nonempty := ⋯, pred_const_ := I.pred_const_,
        pred_var_ := fun X ds =>
          if h : (τ X ds.length).isSome = true then
            if ds.length = ((τ X ds.length).get ⋯).1.length then
              Holds D I (Function.updateListITE V' ((τ X ds.length).get ⋯).1 ds) E ((τ X ds.length).get ⋯).2
            else I.pred_var_ X ds
          else I.pred_var_ X ds }
      V E (phi.iff_ psi) ↔
    Holds D I V E ((replace c τ phi).iff_ (replace c τ psi))