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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.
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.
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.
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This section looks at the code deployed on the relevant chain that gets reviewed and its corresponding software repository. The document explaining these questions is here.
1. Are the smart contract addresses easy to find? (%)
They can be found at https://element-fi.github.io/elf-deploy/, as indicated in the Appendix.
2. How active is the primary contract? (%)
Contract 0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48 is used at its very least 21166 times a day during the last month, as indicated in the Appendix.
3. Does the protocol have a public software repository? (Y/N)
4. Is there a development history visible? (%)
With 189 commits across 16 branches, this is a healthy software repository.
5. Is the team public (not anonymous)?
Where we found the team is documented in our team appendix at the end of this report. Most of the team seems to be pseudonymous, however at least 2 non-anonymous members were found in the github contributors page
The difference between this and the old link is solely the link. This section looks at the software documentation. The document explaining these questions is here.
6. Is there a whitepaper? (Y/N)
7. Is the protocol's software architecture documented? (Y/N)
The Element Finance basic software functions are documented in the "Developers" section of their documentation.
8. Does the software documentation fully cover the deployed contracts' source code? (%)
Element Finance breaks down the major functions from their key contracts in their documentation.
9. Is it possible to trace the documented software to its implementation in the protocol's source code? (%)
The Element Finance function documentation lists and describes the functions, but does not provide any sort of traceability.
10. Has the protocol tested their deployed code? (%)
Code examples are in the Appendix at the end of this report.. As per the SLOC, there is 3969/1400= ~284% 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 reviewer's best judgement is the final deciding factor.
11. How covered is the protocol's code? (%)
Element Finance's core contracts' software repository has 94% code coverage according to their coveralls report.
12. Does the protocol provide scripts and instructions to run their tests? (Y/N)
Scripts/Instructions location: https://github.com/element-fi/elf-contracts/tree/cb909af9b9843abd477980ba6023fb97e053005c#build-and-testing
13. Is there a detailed report of the protocol's test results?(%)
A detailed, full code coverage report is available here at: https://github.com/element-fi/elf-contracts/blob/main/audits/test-report.md.
14. Has the protocol undergone Formal Verification? (Y/N)
No evidence of a Element Finance Formal Verification test was found in their documentation or in further web research.
15. Were the smart contracts deployed to a testnet? (Y/N)
There is evidence of Element Finance's Goerli testnet smart contract usage at https://github.com/element-fi/elf-deploy/blob/main/addresses/goerli.json.
This section looks at the 3rd party software audits done. It is explained in this document.
16. Is the protocol sufficiently audited? (%)
Element's most recent deployment took place on July 22nd 2021. Peckshield completed a smart contract audit on April 14th 2021. Runtime Verification delivered their Element Finance Smart contract audit on April 26th 2021.
17. Is the bounty value acceptably high (%)
This protocol offers an active bug bounty of $100K and a TVL of $143.5M, representing ~0.07% of their TVL.
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.
18. Is the protocol's admin control information easy to find?
Admin control information was clearly documented at this location. This was quick to find.
19. Are relevant contracts clearly labelled as upgradeable or immutable? (%)
All contracts are clearly documented as immutable.
20. Is the type of smart contract ownership clearly indicated? (%)
Ownership is clearly indicated as immutable, with a MultiSig wallet that has temporary (until governance system is implemented), limited administrative powers in this location.
21. Are the protocol's smart contract change capabilities described? (%)
Smart contracts are clearly labelled as immutable with the exception of 3 administrative abilities.
22. Is the protocol's admin control information easy to understand? (%)
All contracts are documented as non-upgradeable with the exception of 3 temporary administrative powers.
23. Is there sufficient Pause Control documentation? (%)
This protocol is immutable with the exception of 3 administrative powers. One of which is the ability to pause a contract that holds user funds. We can then assume that all contracts that do not hold user funds do not have a pause control function. No evidence of pause control tests were found.
24. Is there sufficient Timelock documentation? (%)
Element Finance has timelock documentation which can be found at this location. However, since their governance module is not in effect yet, their timelock is not in effect either. As it currently stands, the protocol has documented that it does not have a timelock. However, since there is a substantial restriction of admin controls, as well as control through a MultiSig wallet, this is a reasonable enough justification for the absence of a timelock.
25. Is the Timelock of an adequate length? (Y/N)
There is no relevant information pertaining to a timelock. Although there is documentation about how the timelock will work with their governance system, the governance system is yet to be implemented.
This section goes over the documentation that a protocol may or may not supply about their Oracle usage. Oracles are a fundamental part of DeFi as they are responsible for relaying tons of price data information to thousands of protocols using blockchain technology. Not only are they important for price feeds, but they are also an essential component of transaction verification and security. This is explained in this document.
26. Is the protocol's Oracle sufficiently documented? (%)
Element Finance does not use oracle(s) as documented here.
27. Is front running mitigated by this protocol? (Y/N)
Front running cannot be applied to Element Finance as it does not depend on oracle(s) as documented here.
28. Can flashloan attacks be applied to the protocol, and if so, are those flashloan attack risks mitigated? (Y/N)
Since there are no oracles, price feed manipulation through flashloan attacks cannot be applied to Element Finance as documented here.
1Enter appendix example code here
Tests to Code: 3969 / 1400 = 284 %