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Premia Finance

62%

Process Quality Review (0.7)

Premia Finance

Final score:62%
Date:04 Nov 2021
Audit Process:version 0.7
Author:Nick of DeFiSafety
PQR Score:62%

FAIL

Scoring Appendix

The final review score is indicated as a percentage. The percentage is calculated as Achieved Points due to MAX Possible Points. For each element the answer can be either Yes/No or a percentage. For a detailed breakdown of the individual weights of each question, please consult this document.

The blockchain used by this protocol
Arbitrum
BnB Smart Chain
Ethereum
#QuestionAnswer
97%
1.100%
2.70%
3.Yes
4.100%
5.Yes
15%
6.Yes
7.No
8.0%
9.32%
10.0%
65%
11.100%
12.50%
13.Yes
14.0%
15.0%
16.100%
79%
17.90%
18.0%
27%
19.100%
20.15%
21.30%
22.0%
Total:62%

Very simply, the audit looks for the following declarations from the developer's site. With these declarations, it is reasonable to trust the smart contracts.

  • Here is my smart contract on the blockchain
  • You can see it matches a software repository used to develop the code
  • Here is the documentation that explains what my smart contract does
  • Here are the tests I ran to verify my smart contract
  • Here are the audit(s) performed to review my code by third party experts

This report is for informational purposes only and does not constitute investment advice of any kind, nor does it constitute an offer to provide investment advisory or other services. Nothing in this report shall be considered a solicitation or offer to buy or sell any security, token, future, option or other financial instrument or to offer or provide any investment advice or service to any person in any jurisdiction. Nothing contained in this report constitutes investment advice or offers any opinion with respect to the suitability of any security, and the views expressed in this report should not be taken as advice to buy, sell or hold any security. The information in this report should not be relied upon for the purpose of investing. In preparing the information contained in this report, we have not taken into account the investment needs, objectives and financial circumstances of any particular investor. This information has no regard to the specific investment objectives, financial situation and particular needs of any specific recipient of this information and investments discussed may not be suitable for all investors.

Any views expressed in this report by us were prepared based upon the information available to us at the time such views were written. The views expressed within this report are limited to DeFiSafety and the author and do not reflect those of any additional or third party and are strictly based upon DeFiSafety, its authors, interpretations and evaluation of relevant data. Changed or additional information could cause such views to change. All information is subject to possible correction. Information may quickly become unreliable for various reasons, including changes in market conditions or economic circumstances.

This completed report is copyright (c) DeFiSafety 2021. Permission is given to copy in whole, retaining this copyright label.

Code And Team

97%

This section looks at the code deployed on the Mainnet that gets reviewed and its corresponding software repository. The document explaining these questions is here.

1. Are the executing code addresses readily available? (%)

Answer: 100%

The executing code addresses are easily found in their docs, and in their repository.

Percentage Score Guidance:
100%
Clearly labelled and on website, docs or repo, quick to find
70%
Clearly labelled and on website, docs or repo but takes a bit of looking
40%
Addresses in mainnet.json, in discord or sub graph, etc
20%
Address found but labeling not clear or easy to find
0%
Executing addresses could not be found

2. Is the code actively being used? (%)

Answer: 70%

Activity is more than 10 transactions a week on contract WETH-DAI Pool Proxy, as indicated in the Appendix.

Percentage Score Guidance:
100%
More than 10 transactions a day
70%
More than 10 transactions a week
40%
More than 10 transactions a month
10%
Less than 10 transactions a month
0%
No activity

3. Is there a public software repository? (Y/N)

Answer: Yes

Is there a public software repository with the code at a minimum, but also normally test and scripts. Even if the repository was created just to hold the files and has just 1 transaction, it gets a "Yes". For teams with private repositories, this answer is "No"

Score Guidance:
Yes
There is a public software repository with the code at a minimum, but also normally test and scripts. Even if the repository was created just to hold the files and has just 1 transaction.
No
For teams with private repositories.

4. Is there a development history visible? (%)

Answer: 100%

At 1938 commits, Premia clearly places a premium on development documentation practices.

This metric checks if the software repository demonstrates a strong steady history. This is normally demonstrated by commits, branches and releases in a software repository. A healthy history demonstrates a history of more than a month (at a minimum).

Percentage Score Guidance:
100%
Any one of 100+ commits, 10+branches
70%
Any one of 70+ commits, 7+branches
50%
Any one of 50+ commits, 5+branches
30%
Any one of 30+ commits, 3+branches
0%
Less than 2 branches or less than 30 commits

5. Is the team public (not anonymous)? (Y/N)

Answer: Yes

For a "Yes" in this question, the real names of some team members must be public on the website or other documentation (LinkedIn, etc). If the team is anonymous, then this question is a "No".

Documentation

15%

This section looks at the software documentation. The document explaining these questions is here.

6. Is there a whitepaper? (Y/N)

Answer: Yes

7. Are the basic software functions documented? (Y/N)

Answer: No

Software functions are not covered by Premia documentation.

8. Does the software function documentation fully (100%) cover the deployed contracts? (%)

Answer: 0%

There is no software function documentation that covers the deployed contracts.

Percentage Score Guidance:
100%
All contracts and functions documented
80%
Only the major functions documented
79 - 1%
Estimate of the level of software documentation
0%
No software documentation

9. Are there sufficiently detailed comments for all functions within the deployed contract code (%)

Answer: 32%

Code examples are in the Appendix. As per the SLOC, there is 32% commenting to code (CtC).

The Comments to Code (CtC) ratio is the primary metric for this score.

Percentage Score Guidance:
100%
CtC > 100 Useful comments consistently on all code
90 - 70%
CtC > 70 Useful comment on most code
60 - 20%
CtC > 20 Some useful commenting
0%
CtC < 20 No useful commenting

10. Is it possible to trace from software documentation to the implementation in code (%)

Answer: 0%

There is no software function documentation that covers the deployed contracts.

Percentage Score Guidance:
100%
Clear explicit traceability between code and documentation at a requirement level for all code
60%
Clear association between code and documents via non explicit traceability
40%
Documentation lists all the functions and describes their functions
0%
No connection between documentation and code

Testing

65%

11. Full test suite (Covers all the deployed code) (%)

Answer: 100%

Code examples are in the Appendix. As per the SLOC, there is 669% testing to code (TtC).

This score is guided by the Test to Code ratio (TtC). Generally a good test to code ratio is over 100%. However the reviewers best judgement is the final deciding factor.

Percentage Score Guidance:
100%
TtC > 120% Both unit and system test visible
80%
TtC > 80% Both unit and system test visible
40%
TtC < 80% Some tests visible
0%
No tests obvious

12. Code coverage (Covers all the deployed lines of code, or explains misses) (%)

Answer: 50%

While there is no code coverage report, at 669% it is clear that this protocol has undergone rigorous, deep, hard and full bodied testing with every part of this protocol being fully examined.

Percentage Score Guidance:
100%
Documented full coverage
99 - 51%
Value of test coverage from documented results
50%
No indication of code coverage but clearly there is a reasonably complete set of tests
30%
Some tests evident but not complete
0%
No test for coverage seen

13. Scripts and instructions to run the tests? (Y/N)

Answer: Yes

14. Report of the results (%)

Answer: 0%

No test report was found.

Percentage Score Guidance:
100%
Detailed test report as described below
70%
GitHub code coverage report visible
0%
No test report evident

15. Formal Verification test done (%)

Answer: 0%

No documented formal verification was found.

16. Stress Testing environment (%)

Answer: 100%

Premia conducted a trading contest on a testnet. This effort should be commended: few protocols have provided such detailed breakdowns of the results!

Security

79%

This section looks at the 3rd party software audits done. It is explained in this document.

17. Did 3rd Party audits take place? (%)

Answer: 90%

Premia's initial deployment has been audited post-launch. V2 deployed 3 weeks ago, and the pre-launch audit can be found here.

Percentage Score Guidance:
100%
Multiple Audits performed before deployment and results public and implemented or not required
90%
Single audit performed before deployment and results public and implemented or not required
70%
Audit(s) performed after deployment and no changes required. Audit report is public
50%
Audit(s) performed after deployment and changes needed but not implemented
20%
No audit performed
0%
Audit Performed after deployment, existence is public, report is not public and no improvements deployed OR smart contract address not found, (where question 1 is 0%)
Deduct 25% if code is in a private repo and no note from auditors that audit is applicable to deployed code.

18. Is the bug bounty acceptable high? (%)

Answer: 0%

No bug bounty program is documented.

Percentage Score Guidance:
100%
Bounty is 10% TVL or at least $1M AND active program (see below)
90%
Bounty is 5% TVL or at least 500k AND active program
80%
Bounty is 5% TVL or at least 500k
70%
Bounty is 100k or over AND active program
60%
Bounty is 100k or over
50%
Bounty is 50k or over AND active program
40%
Bounty is 50k or over
20%
Bug bounty program bounty is less than 50k
0%
No bug bounty program offered
An active program means that a third party (such as Immunefi) is actively driving hackers to the site. An inactive program would be static mentions on the docs.

Access Controls

27%

This section covers the documentation of special access controls for a DeFi protocol. The admin access controls are the contracts that allow updating contracts or coefficients in the protocol. Since these contracts can allow the protocol admins to "change the rules", complete disclosure of capabilities is vital for user's transparency. It is explained in this document.

19. Can a user clearly and quickly find the status of the access controls (%)

Answer: 100%

Governance information can easily be found. ​

Percentage Score Guidance:
100%
Clearly labelled and on website, docs or repo, quick to find
70%
Clearly labelled and on website, docs or repo but takes a bit of looking
40%
Access control docs in multiple places and not well labelled
20%
Access control docs in multiple places and not labelled
0%
Admin Control information could not be found

20. Is the information clear and complete (%)

Answer: 15%

a) All contracts are clearly labelled as upgradeable (or not) -- 0% -- no contracts are labelled as upgradeable  b) The type of ownership is clearly indicated (OnlyOwner / MultiSig / Defined Roles) -- 15% -- governance is in control of the direction of the protocol, but it is unclear if the votes are binding.  c) The capabilities for change in the contracts are described -- 0% -- contract change capability is not described.

Percentage Score Guidance:
All the contracts are immutable -- 100% OR
a) All contracts are clearly labelled as upgradeable (or not) -- 30% AND
b) The type of ownership is clearly indicated (OnlyOwner / MultiSig / Defined Roles) -- 30% AND
c) The capabilities for change in the contracts are described -- 30%

21. Is the information in non-technical terms that pertain to the investments (%)

Answer: 30%

This information is in clear and easily comprehensible information, but does not relate to user investment safety.

Percentage Score Guidance:
100%
All the contracts are immutable
90%
Description relates to investments safety and updates in clear, complete non-software language
30%
Description all in software specific language
0%
No admin control information could be found

22. Is there Pause Control documentation including records of tests (%)

Answer: 0%

No pause guardian was documented.

Percentage Score Guidance:
100%
All the contracts are immutable or no pause control needed and this is explained OR Pause control(s) are clearly documented and there is records of at least one test within 3 months
80%
Pause control(s) explained clearly but no evidence of regular tests
40%
Pause controls mentioned with no detail on capability or tests
0%
Pause control not documented or explained

Appendices

 The author of this review is Rex of DeFi Safety.

Email: rex@defisafety.com
Twitter: @defisafety

I started with Ethereum just before the DAO and that was a wonderful education.  It showed the importance of code quality. The second Parity hack also showed the importance of good process.  Here my aviation background offers some value. Aerospace knows how to make reliable code using quality processes.
I was coaxed to go to EthDenver 2018 and there I started SecuEth.org with Bryant and Roman. We created guidelines on good processes for blockchain code development. We got EthFoundation funding to assist in their development Process Quality Reviews are an extension of the SecurEth guidelines that will further increase the quality processes in Solidity and Vyper development. DeFiSafety is my full time gig and we are working on funding vehicles for a permanent staff.

1pragma solidity ^0.8.0;
23import {AggregatorInterface} from "@chainlink/contracts/src/v0.8/interfaces/AggregatorInterface.sol";
4import {AggregatorV3Interface} from "@chainlink/contracts/src/v0.8/interfaces/AggregatorV3Interface.sol";
5import {EnumerableSet, ERC1155EnumerableStorage} from "@solidstate/contracts/token/ERC1155/enumerable/ERC1155EnumerableStorage.sol";
67import {ABDKMath64x64} from "abdk-libraries-solidity/ABDKMath64x64.sol";
8import {ABDKMath64x64Token} from "../libraries/ABDKMath64x64Token.sol";
9import {OptionMath} from "../libraries/OptionMath.sol";
1011library PoolStorage {
12    using ABDKMath64x64 for int128;
13    using PoolStorage for PoolStorage.Layout;
1415    enum TokenType {
16        UNDERLYING_FREE_LIQ,
17        BASE_FREE_LIQ,
18        UNDERLYING_RESERVED_LIQ,
19        BASE_RESERVED_LIQ,
20        LONG_CALL,
21        SHORT_CALL,
22        LONG_PUT,
23        SHORT_PUT
24    }
2526    struct PoolSettings {
27        address underlying;
28        address base;
29        address underlyingOracle;
30        address baseOracle;
31    }
3233    struct QuoteArgsInternal {
34        address feePayer; // address of the fee payer
35        uint64 maturity; // timestamp of option maturity
36        int128 strike64x64; // 64x64 fixed point representation of strike price
37        int128 spot64x64; // 64x64 fixed point representation of spot price
38        uint256 contractSize; // size of option contract
39        bool isCall; // true for call, false for put
40    }
4142    struct QuoteResultInternal {
43        int128 baseCost64x64; // 64x64 fixed point representation of option cost denominated in underlying currency (without fee)
44        int128 feeCost64x64; // 64x64 fixed point representation of option fee cost denominated in underlying currency for call, or base currency for put
45        int128 cLevel64x64; // 64x64 fixed point representation of C-Level of Pool after purchase
46        int128 slippageCoefficient64x64; // 64x64 fixed point representation of slippage coefficient for given order size
47    }
4849    struct BatchData {
50        uint256 eta;
51        uint256 totalPendingDeposits;
52    }
5354    bytes32 internal constant STORAGE_SLOT =
55        keccak256("premia.contracts.storage.Pool");
5657    uint256 private constant C_DECAY_BUFFER = 12 hours;
58    uint256 private constant C_DECAY_INTERVAL = 4 hours;
5960    struct Layout {
61        // ERC20 token addresses
62        address base;
63        address underlying;
64        // AggregatorV3Interface oracle addresses
65        address baseOracle;
66        address underlyingOracle;
67        // token metadata
68        uint8 underlyingDecimals;
69        uint8 baseDecimals;
70        // minimum amounts
71        uint256 baseMinimum;
72        uint256 underlyingMinimum;
73        // deposit caps
74        uint256 basePoolCap;
75        uint256 underlyingPoolCap;
76        // market state
77        int128 _deprecated_steepness64x64;
78        int128 cLevelBase64x64;
79        int128 cLevelUnderlying64x64;
80        uint256 cLevelBaseUpdatedAt;
81        uint256 cLevelUnderlyingUpdatedAt;
82        uint256 updatedAt;
83        // User -> isCall -> depositedAt
84        mapping(address => mapping(bool => uint256)) depositedAt;
85        mapping(address => mapping(bool => uint256)) divestmentTimestamps;
86        // doubly linked list of free liquidity intervals
87        // isCall -> User -> User
88        mapping(bool => mapping(address => address)) liquidityQueueAscending;
89        mapping(bool => mapping(address => address)) liquidityQueueDescending;
90        // minimum resolution price bucket => price
91        mapping(uint256 => int128) bucketPrices64x64;
92        // sequence id (minimum resolution price bucket / 256) => price update sequence
93        mapping(uint256 => uint256) priceUpdateSequences;
94        // isCall -> batch data
95        mapping(bool => BatchData) nextDeposits;
96        // user -> batch timestamp -> isCall -> pending amount
97        mapping(address => mapping(uint256 => mapping(bool => uint256))) pendingDeposits;
98        EnumerableSet.UintSet tokenIds;
99        // user -> isCallPool -> total value locked of user (Used for liquidity mining)
100        mapping(address => mapping(bool => uint256)) userTVL;
101        // isCallPool -> total value locked
102        mapping(bool => uint256) totalTVL;
103        // steepness values
104        int128 steepnessBase64x64;
105        int128 steepnessUnderlying64x64;
106    }
107108    function layout() internal pure returns (Layout storage l) {
109        bytes32 slot = STORAGE_SLOT;
110        assembly {
111            l.slot := slot
112        }
113    }
114115    /*
116     * @notice calculate ERC1155 token id for given option parameters
117     * @param tokenType TokenType enum
118     * @param maturity timestamp of option maturity
119     * @param strike64x64 64x64 fixed point representation of strike price
120     * @return tokenId token id
121     */
122    function formatTokenId(
123        TokenType tokenType,
124        uint64 maturity,
125        int128 strike64x64
126    ) internal pure returns (uint256 tokenId) {
127        tokenId =
128            (uint256(tokenType) << 248) +
129            (uint256(maturity) << 128) +
130            uint256(int256(strike64x64));
131    }
132133    /*
134     * @notice derive option maturity and strike price from ERC1155 token id
135     * @param tokenId token id
136     * @return tokenType TokenType enum
137     * @return maturity timestamp of option maturity
138     * @return strike64x64 option strike price
139     */
140    function parseTokenId(uint256 tokenId)
141        internal
142        pure
143        returns (
144            TokenType tokenType,
145            uint64 maturity,
146            int128 strike64x64
147        )
148    {
149        assembly {
150            tokenType := shr(248, tokenId)
151            maturity := shr(128, tokenId)
152            strike64x64 := tokenId
153        }
154    }
155156    function getTokenDecimals(Layout storage l, bool isCall)
157        internal
158        view
159        returns (uint8 decimals)
160    {
161        decimals = isCall ? l.underlyingDecimals : l.baseDecimals;
162    }
163164    /**
165     * @notice get the total supply of free liquidity tokens, minus pending deposits
166     * @param l storage layout struct
167     * @param isCall whether query is for call or put pool
168     * @return 64x64 fixed point representation of total free liquidity
169     */
170    function totalFreeLiquiditySupply64x64(Layout storage l, bool isCall)
171        internal
172        view
173        returns (int128)
174    {
175        uint256 tokenId = formatTokenId(
176            isCall ? TokenType.UNDERLYING_FREE_LIQ : TokenType.BASE_FREE_LIQ,
177            0,
178            0
179        );
180181        return
182            ABDKMath64x64Token.fromDecimals(
183                ERC1155EnumerableStorage.layout().totalSupply[tokenId] -
184                    l.nextDeposits[isCall].totalPendingDeposits,
185                l.getTokenDecimals(isCall)
186            );
187    }
188189    function getReinvestmentStatus(
190        Layout storage l,
191        address account,
192        bool isCallPool
193    ) internal view returns (bool) {
194        uint256 timestamp = l.divestmentTimestamps[account][isCallPool];
195        return timestamp == 0 || timestamp > block.timestamp;
196    }
197198    function addUnderwriter(
199        Layout storage l,
200        address account,
201        bool isCallPool
202    ) internal {
203        require(account != address(0));
204205        mapping(address => address) storage asc = l.liquidityQueueAscending[
206            isCallPool
207        ];
208        mapping(address => address) storage desc = l.liquidityQueueDescending[
209            isCallPool
210        ];
211212        if (_isInQueue(account, asc, desc)) return;
213214        address last = desc[address(0)];
215216        asc[last] = account;
217        desc[account] = last;
218        desc[address(0)] = account;
219    }
N/A