The audit makes no statements or warranties about utility of the code, safety of the code, suitability of the business model, investment advice, endorsement of the platform or its products, regulatory regime for the business model, or any other statements about fitness of the contracts to purpose, or their bug free status. The audit documentation is for discussion purposes only. The information presented in this report is confidential and privileged. If you are reading this report, you agree to keep it confidential, not to copy, disclose or disseminate without the agreement of the Client. If you are not the intended recipient(s) of this document, please note that any disclosure, copying or dissemination of its content is strictly forbidden.
A group of auditors are involved in the work on the audit. The security engineers check the provided source code independently of each other in accordance with the methodology described below:
- Project documentation review.
- General code review.
- Reverse research and study of the project architecture on the source code alone.
- Build an independent view of the project's architecture.
- Identifying logical flaws.
- Manual code check for vulnerabilities listed on the Contractor's internal checklist. The Contractor's checklist is constantly updated based on the analysis of hacks, research, and audit of the clients' codes.
- Code check with the use of static analyzers (i.e Slither, Mythril, etc).
Eliminate typical vulnerabilities (e.g. reentrancy, gas limit, flash loan attacks etc.).
- Detailed study of the project documentation.
- Examination of contracts tests.
- Examination of comments in code.
- Comparison of the desired model obtained during the study with the reversed view obtained during the blind audit.
- Exploits PoC development with the use of such programs as Brownie and Hardhat.
Detect inconsistencies with the desired model.
- Cross check: each auditor reviews the reports of the others.
- Discussion of the issues found by the auditors.
- Issuance of an interim audit report.
- Double-check all the found issues to make sure they are relevant and the determined threat level is correct.
- Provide the Client with an interim report.
- The Client either fixes the issues or provides comments on the issues found by the auditors. Feedback from the Customer must be received on every issue/bug so that the Contractor can assign them a status (either "fixed" or "acknowledged").
- Upon completion of the bug fixing, the auditors double-check each fix and assign it a specific status, providing a proof link to the fix.
- A re-audited report is issued.
- Verify the fixed code version with all the recommendations and its statuses.
- Provide the Client with a re-audited report.
- The Customer deploys the re-audited source code on the mainnet.
- The Contractor verifies the deployed code with the re-audited version and checks them for compliance.
- If the versions of the code match, the Contractor issues a public audit report.
- Conduct the final check of the code deployed on the mainnet.
- Provide the Customer with a public audit report.
All vulnerabilities discovered during the audit are classified based on their potential severity and have the following classification:
| Severity | Description |
|---|---|
| Critical | Bugs leading to assets theft, fund access locking, or any other loss of funds. |
| High | Bugs that can trigger a contract failure. Further recovery is possible only by manual modification of the contract state or replacement. |
| Medium | Bugs that can break the intended contract logic or expose it to DoS attacks, but do not cause direct loss funds. |
| Low | Bugs that do not have a significant immediate impact and could be easily fixed. |
Based on the feedback received from the Customer regarding the list of findings discovered by the Contractor, they are assigned the following statuses:
| Status | Description |
|---|---|
| Fixed | Recommended fixes have been made to the project code and no longer affect its security. |
| Acknowledged | The Customer is aware of the finding. Recommendations for the finding are planned to be resolved in the future. |
The project implements a Proof-of-Reserves (PoR) oracle system for integration with Morpho and Euler lending protocols. Project scope includes UsrRedemptionExtension contract, which implements a redemption mechanism that allows users to exchange USR tokens for supported withdrawal tokens (like USDC) at current market rates if USR to USD peg is maintained at the 1:1 ratio.
| Title | Description |
|---|---|
| Client | Resolv |
| Project name | PoR Oracles |
| Timeline | 18.12.2024 - 20.12.2024 |
| Number of Auditors | 3 |
| Date | Commit Hash | Note |
|---|---|---|
| 18.12.2024 | f4a09fa74498b19708b056af6adc070e1272b59b | Commit for the audit |
| 20.12.2024 | 77d8ed1d04e01c1f756470fe1cf2069a7667c2f3 | Commit for the re-audit |
| 20.12.2024 | 636519d48f52ac5f3471de1bead411743287725a | Commit with updates |
The audit covered the following files:
| File name | Link |
|---|---|
| contracts/RlpPriceStorage.sol | https://github.com/resolv-im/resolv-contracts/blob/f4a09fa74498b19708b056af6adc070e1272b59b/contracts/RlpPriceStorage.sol |
| contracts/UsrPriceStorage.sol | https://github.com/resolv-im/resolv-contracts/blob/f4a09fa74498b19708b056af6adc070e1272b59b/contracts/UsrPriceStorage.sol |
| contracts/UsrRedemptionExtension.sol | https://github.com/resolv-im/resolv-contracts/blob/f4a09fa74498b19708b056af6adc070e1272b59b/contracts/UsrRedemptionExtension.sol |
| File name | Contract deployed on mainnet | Comment |
|---|---|---|
| UsrRedemptionExtension.sol | 0xb69B2ea98f0fCEf104B5cdE7d9236601D8c96bE6 | |
| TransparentUpgradeableProxy.sol | 0xaE2364579D6cB4Bbd6695846C1D595cA9AF3574d | Proxy for RlpPriceStorage |
| RlpPriceStorage.sol | 0x5e90b0a657643C08a45cbD6a06337b37c98e1aA1 | |
| TransparentUpgradeableProxy.sol | 0x7f45180d6fFd0435D8dD695fd01320E6999c261c | Proxy for UsrPriceStorage |
| UsrPriceStorage.sol | 0xc16B2a7a773C23E3e9D3325c7b173ef24fc2785d |
| Severity | # of Findings |
|---|---|
| CRITICAL | 1 |
| HIGH | 0 |
| MEDIUM | 0 |
| LOW | 6 |
During the audit, apart from checking well-known attack vectors and vectors that are presented in our internal checklist, we carefully investigated the next attack vectors:
-
The
redeemfunction inUsrRedemptionExtensionmaintains price stability through a balanced mechanism: when a user redeems USR tokens, two synchronized actions occur:- The USR tokens are burned (
ISimpleToken(USR_TOKEN_ADDRESS).burn()) - An equivalent value in withdrawal tokens is removed from the treasury (either from its balance or through Aave borrowing)
The redemption amount is calculated using current Chainlink oracle prices and USR price from storage. This ensures that redemptions cannot manipulate the next price update in
UsrPriceStorage. - The USR tokens are burned (
-
Reserves are correctly calculated, including accounting of total borrowed assets in Aave and pending withdrawals in Lido and Dinero.
The total reserves are computed through a detailed formula that accounts for both liquid and pending assets:
-
Ethereum-based assets:
- Direct holdings (wstETH, stETH, ETH) with respective protocol exchange rates
- Aave positions (supplied wstETH and borrowed WETH)
- Lido positions (requested and claimable withdrawals)
- Dinero positions (apxETH with exchange rate, initiated and redeemable redemptions) All ETH-denominated values are converted to USD using a weighted average futures price based on total short positions
-
Stablecoin positions:
- Direct USDC and USDT holdings excluding Aave borrowed positions for both stablecoins Final values are converted using Pyth (Hermes) oracle prices
-
-
Reserves value can be increased by manipulation, but it doesn't make a lot of sense to increase reserves for manipulating the USR price because it is capped at $1, so it cannot be used in some type of economic attack. Reserves manipulation makes more sense for RLP, but its oracle has an upper bound, so a huge donation will lead only to DoS, which doesn't make a lot of sense for a hacker. So, we haven't found a profitable way for a hacker to manipulate the oracle prices, but it can be done for the RLP price till it reaches the upper bound, so it should be set considering this.
-
The
UsrRedemptionExtensioncontract implements a daily redemption cap system that makes it impossible to exceed the redemption limit through a combination of time-based and amount-based checks. The contract continuously tracks the time elapsed sincelastResetTime, and when a full day has passed (currentTime >= lastResetTime + 1 days), it calculates the number of periods passed, updates thelastResetTime, and resets thecurrentRedemptionUsagecounter to zero. Before each redemption, the contract adds the requested amount tocurrentRedemptionUsageand strictly enforces the cap by reverting withRedemptionLimitExceededif the total would exceedredemptionLimit. This mechanism ensures that daily limits are properly reset and no redemption can push usage above the limit, maintaining accurate tracking. -
Support for stablecoins with varying decimals is implemented in the
UsrRedemptionExtensioncontract through a decimal adjustment system. When processing redemptions, the contract first retrieves and validates the withdrawal token's decimals usingIERC20Metadata(_withdrawalTokenAddress).decimals(), ensuring they don't exceedUSR_DECIMALS. The redemption amount calculation then accounts for these decimal differences by applying the appropriate scaling factor. Additionally, in thegetRedeemPricefunction, the contract handles Chainlink oracle price feeds with different decimal precisions by dynamically adjusting the price value, ensuring accurate price conversions regardless of the stablecoin's decimal configuration. -
System configuration changes in the contracts are strictly controlled through OpenZeppelin's AccessControl implementation, ensuring that sensitive operations can only be executed by privileged users. All configuration functions are protected by role-based modifiers:
onlyRole(DEFAULT_ADMIN_ROLE)is used for administrative operations like setting parameters, managing allowed tokens, and controlling system pauses, whileonlyRole(SERVICE_ROLE)is applied to operational functions like price updates and redemptions. This dual-role system, implemented through inheritance fromAccessControlDefaultAdminRules, provides a clear separation of administrative privileges, with the admin role having a mandatory time-delay of 1 day for role transfers.
Fixed in https://github.com/resolv-im/resolv-contracts/commit/77d8ed1d04e01c1f756470fe1cf2069a7667c2f3
A critical issue was uncovered in the redeem function of the UsrRedemptionExtension contract. The flaw lies in the way the redeemPrice is determined. The current code fetches the redeemPrice as the cost of 1 USDC in USR, mistakenly multiplying this price by the USR amount, which leads to incorrect calculations and loss for the protocol or users. For instance, if the USDC market price rises to $1.03, for 100 burned USR, the user will receive 103 USDC, which at the new market price would be approximately $106. This flaw can lead to users receiving more than intended or less in cases of USDC price decrese. The issue is classified as of critical severity due to its potential for financial impact.
We recommend modifying the code to divide by redeemPrice instead of multiplying it, thereby ensuring the price calculation aligns with potential market fluctuations of USDC.
https://github.com/resolv-im/resolv-contracts/commit/8038a8e305afcc69b61cae2796843f38ee13001c
NOT FOUND
NOT FOUND
Fixed in https://github.com/resolv-im/resolv-contracts/commit/77d8ed1d04e01c1f756470fe1cf2069a7667c2f3
A potential issue has been detected within the redeemWithPermit function of the UsrRedemptionExtension contract. The approach allows updating the approved amount via permit call, which is deemed unnecessary as tokens are burnt, not transferred from the receiver. It’s more of functional redundancy than a security flaw, though highlights an area of coding optimization.
We recommend removing the redeemWithPermit function to improve code efficiency.
https://github.com/resolv-im/resolv-contracts/commit/a6651f6270ab5f0fd591297679e8b994d2f23aee
Fixed in https://github.com/resolv-im/resolv-contracts/commit/77d8ed1d04e01c1f756470fe1cf2069a7667c2f3
An issue has been spotted in the removeAllowedWithdrawalToken function of the UsrRedemptionExtension contract. This function unnecessarily checks the validity of the _allowedWithdrawalTokenAddress twice, first through a modifier and then directly in the function body itself. While this does not pose a direct security risk, it is considered as a wasteful operation that could potentially increase gas cost.
We recommend removing the redundant security check for _allowedWithdrawalTokenAddress.
https://github.com/resolv-im/resolv-contracts/commit/7eefefa54dce364aaf208588a9101a32d70d3c12
Fixed in https://github.com/resolv-im/resolv-contracts/commit/636519d48f52ac5f3471de1bead411743287725a
The issue was found in the getRedeemPrice function of the smart contract. The presence of the hardcoded decimal value 18 has been detected, which suggests a reduced flexibility of the contract on different blockchain networks. This issue is classified as low severity, as it poses minimal immediate security threat. However, it does limit the contract's adaptability across various chains, potentially hindering its broad usage.
We suggest replacing the hardcoded decimal 18 with USR_DECIMALS across the contract.
Client: https://github.com/resolv-im/resolv-contracts/commit/9b12312bf20a225bc7833d246ba245cc33cc2207 MixBytes: There is also a check at the following line, which ensures that
withdrawalTokenDecimalsis not greater thanUSR_DECIMALS. If USR is redeployed with fewer decimals, this check will prevent the use of tokens with more decimals. We recommend removing this check and adapting the code to allowwithdrawalTokento have more decimals than USR.
Fixed in https://github.com/resolv-im/resolv-contracts/commit/77d8ed1d04e01c1f756470fe1cf2069a7667c2f3
The issue has been discovered in the getRedeemPrice function of the UsrRedemptionExtension contract. When the priceDecimals equals to USR_DECIMALS, the casting operation in the function for the price variable is potentially unsafe.
While the current code configuration does not pose a direct security threat, implementing type-safe operations would enhance the contract's reliability and robustness against potential bugs. We recommend the utilization of SafeCast for price when the decimals are equal.
https://github.com/resolv-im/resolv-contracts/commit/8fcf350915c692cc4b470a24b23dec5e732d2d2a
Fixed in https://github.com/resolv-im/resolv-contracts/commit/77d8ed1d04e01c1f756470fe1cf2069a7667c2f3
The issue is identified within the function getUSRPrice of contract UsrRedemptionExtension.
The function declares a named return variable usrPrice but never explicitly assigns a value to it. Instead, the function implicitly returns the price variable. While this doesn't affect functionality, it reduces code clarity.
We recommend removing the named return variable.
https://github.com/resolv-im/resolv-contracts/commit/4421e92bef5be1a91587345afa98d7319f39aa43
Fixed in https://github.com/resolv-im/resolv-contracts/commit/77d8ed1d04e01c1f756470fe1cf2069a7667c2f3
This issue has been identified in the constructor of the contract UsrRedemptionExtension.
-
Potentially Large
_lastResetTime: The constructor does not include validation to ensure that_lastResetTimeis within a reasonable range. If an excessively large value is mistakenly provided, it could result in thecurrentRedemptionUsagebeing reset far into the future. Furthermore, an incorrectly largelastResetTimecannot be corrected after deployment. -
Duplicate Entries in
_allowedWithdrawalTokenAddresses: The constructor does not validate that the addresses provided in_allowedWithdrawalTokenAddressesare unique. While this does not affect the correctness of the contract, it could make debugging and identification of invalid parameters more challenging.
The issue is classified as low severity because it does not compromise the protocol's security directly but could lead to operational inefficiencies and errors.
- Add a check in the constructor to ensure that
_lastResetTimeis not excessively large and falls within a sensible range. - Add a check in
UsrRedemptionExtension.addAllowedWithdrawalToken()that the token being added has not already been added.
https://github.com/resolv-im/resolv-contracts/commit/77d8ed1d04e01c1f756470fe1cf2069a7667c2f3
MixBytes is a team of blockchain developers, auditors and analysts keen on decentralized systems. We build opensource solutions, smart contracts and blockchain protocols, perform security audits, work on benchmarking and software testing solutions, do research and tech consultancy.