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Liquity

97%

Previous versions

Process Quality Review (0.8)

Liquity

Final score %gold97
Date:11 Mar 2022
Audit Process:version 0.8
Author:Nick
PQR Score:97%

PASS

Protocol Website:https://www.liquity.org/

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
Ethereum
#QuestionAnswer
100%
1.100%
2.100%
3.Yes
4.100%
5.100
100%
6.Yes
7.Yes
8.100%
9.100%
90%
10.100%
11.98%
12.Yes
13.100%
14.No
15.Yes
96%
16.100%
17.70%
100%
18.100%
19.100%
20.100%
21.100%
22.100%
23.100%
24.100%
25.100%
100%
26.100
27.Yes
28.Yes
Total:97%

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 2023. Permission is given to copy in whole, retaining this copyright label.

Smart Contracts & Team

100%

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? (%)

Answer: 100%

They can be found at https://docs.liquity.org/documentation/resources , as indicated in the Appendix.

Percentage Score Guidance:
100%
Clearly labelled and on website, documents or repository, 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. How active is the primary contract? (%)

Answer: 100%

Contract Borrow Operations is used 20+ times a day, 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. Does the protocol have a public software repository? (Y/N)

Answer: Yes

https://github.com/liquity

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 2830 commits and 52 branches, this protocol has some of the most well-moisturised development history we've ever seen. This protocol's development history exemplifies the following traits: "Unbothered. Moisturized. Happy. In My Lane. Focused. Flourishing."

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)?

Answer: 100

This team is fully public.

Score Guidance:
100%
At least two names can be easily found in the protocol's website, documentation or medium. These are then confirmed by the personal websites of the individuals / their linkedin / twitter.
50%
At least one public name can be found to be working on the protocol.
0%
No public team members could be found.

Documentation

100%

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)

Answer: Yes

Location: https://docs.liquity.org/

7. Is the protocol's software architecture documented? (Y/N)

Answer: Yes

This protocol's software architecture is documented in full.

Score Guidance:
Yes
The documents identify software architecture and contract interaction through any of the following: diagrams, arrows, specific reference to software functions or a written explanation on how smart contracts interact.
No
Protocols receive a "no" if none of these are included.

8. Does the software documentation fully cover the deployed contracts' source code? (%)

Answer: 100%

There is full coverage of deployed contracts by software function documentation.

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. Is it possible to trace the documented software to its implementation in the protocol's source code? (%)

Answer: 100%

There is clear and explicit traceability between software documentation and implemented code.

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

90%

10. Has the protocol tested their deployed code? (%)

Answer: 100%

Code examples are in the Appendix at the end of this report.. As per the SLOC, there is 287% 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.

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

11. How covered is the protocol's code? (%)

Answer: 98%

This protocol documents 98% code coverage.

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 complete set of tests
30%
Some tests evident but not complete
0%
No test for coverage seen

12. Does the protocol provide scripts and instructions to run their tests? (Y/N)

Answer: Yes

Scripts/Instructions location: https://github.com/liquity/dev#running-tests

Score Guidance:
Yes
Scripts and/or instructions to run tests are available in the testing suite
No
Scripts and/or instructions to run tests are not available in the testing suite

13. Is there a detailed report of the protocol's test results?(%)

Answer: 100%

A full report is detailed

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

14. Has the protocol undergone Formal Verification? (Y/N)

Answer: No

This protocol has not undergone formal verification.

Score Guidance:
Yes
Formal Verification was performed and the report is readily available
No
Formal Verification was not performed and/or the report is not readily available.

15. Were the smart contracts deployed to a testnet? (Y/N)

Answer: Yes

This protocol has been deployed to a testnet.

Score Guidance:
Yes
Protocol has proved their tesnet usage by providing the addresses
No
Protocol has not proved their testnet usage by providing the addresses

Security

96%

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

16. Is the protocol sufficiently audited? (%)

Answer: 100%

Liquity was audited multiple times before launch.

Percentage Score Guidance:
100%
Multiple Audits performed before deployment and the audit findings are public and implemented or not required
90%
Single audit performed before deployment and audit findings are public and implemented or not required
70%
Audit(s) performed after deployment and no changes required. The Audit report is public.
65%
Code is forked from an already audited protocol and a changelog is provided explaining why forked code was used and what changes were made. This changelog must justify why the changes made do not affect the audit.
50%
Audit(s) performed after deployment and changes are needed but not implemented.
30%
Audit(s) performed are low-quality and do not indicate proper due diligence.
20%
No audit performed
0%
Audit Performed after deployment, existence is public, report is not public OR smart contract address' not found.
Deduct 25% if the audited code is not available for comparison.

17. Is the bounty value acceptably high (%)

Answer: 70%

This protocol offers an active bug bounty of $250K

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 / the bug bounty program is dead
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.

Admin Controls

100%

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?

Answer: 100%

Admin control information was fully documented at this location. This took some looking.

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

19. Are relevant contracts clearly labelled as upgradeable or immutable? (%)

Answer: 100%

The relevant contracts are identified as immutable, as identified here.

Percentage Score Guidance:
100%
Both the contract documentation and the smart contract code state that the code is not upgradeable or immutable.
80%
All Contracts are clearly labelled as upgradeable (or not)
50%
Code is immutable but not mentioned anywhere in the documentation
0%
Admin control information could not be found

20. Is the type of smart contract ownership clearly indicated? (%)

Answer: 100%

Ownership is clearly indicated in this location.

Percentage Score Guidance:
100%
The type of ownership is clearly indicated in their documentation. (OnlyOwner / MultiSig / etc)
50%
The type of ownership is indicated, but only in the code. (OnlyOwner / MultiSig / etc)
0%
Admin Control information could not be found

21. Are the protocol's smart contract change capabilities described? (%)

Answer: 100%

This protocol is immutable.

Percentage Score Guidance:
100%
The documentation covers the capabilities for change for all smart contracts
50%
The documentation covers the capabilities for change in some, but not all contracts
0%
The documentation does not cover the capabilities for change in any contract

22. Is the protocol's admin control information easy to understand? (%)

Answer: 100%

This information is not in software specific language.

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

23. Is there sufficient Pause Control documentation? (%)

Answer: 100%

This protocol's pause control is not documented - this is not relevant because the protocol is immutable. Nevertheless, it possesses something called a recovery mode.

Percentage Score Guidance:
100%
If immutable and no changes possible
80%
Robust transaction signing process (7 or more elements)
70%
Adequate transaction signing process (5 or more elements)
60%
Weak transaction signing process (3 or more elements)
0%
No transaction signing process evident
Evidence of audits of signers following the process add 20%

24. Is there sufficient Timelock documentation? (%)

Answer: 100%

This protocol does not stake it possesses a timelock, though this is clear from the fact that all contracts are immutable.

Percentage Score Guidance:
100%
Documentation identifies and explains why the protocol does not need a Timelock OR Timelock documentation identifies its duration, which contracts it applies to and justifies this time period.
60%
A Timelock is identified and its duration is specified
30%
A Timelock is identified
0%
No Timelock information was documented

25. Is the Timelock of an adequate length? (Y/N)

Answer: 100%

This protocol has no timelock.

Percentage Score Guidance:
100%
Timelock is between 48 hours to 1 week OR justification as to why no Timelock is needed / is outside this length.
50%
Timelock is less than 48 hours or greater than 1 week.
0%
No Timelock information was documented OR no timelock length was identified.

Oracles

100%

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? (%)

Answer: 100

The protocol's oracle source is sufficiently documented at this location. The contracts dependent are identified. There is relevant software function documentation.

Score Guidance:
100%
If it uses one, the Oracle is specified. The contracts dependent on the oracle are identified. Basic software functions are identified (if the protocol provides its own price feed data). Timeframe of price feeds are identified. OR The reason as to why the protocol does not use an Oracle is identified and explained.
75%
The Oracle documentation identifies both source and timeframe, but does not provide additional context regarding smart contracts.
50%
Only the Oracle source is identified.
0%
No oracle is named / no oracle information is documented.

27. Is front running mitigated by this protocol? (Y/N)

Answer: Yes

This protocol documents substantial and impressive front running mitigation techniques at this location. This protocol's readme.md is beautiful and other protocols should view it as an example of great process quality they would do well to emulate.

Score Guidance:
Yes
The protocol cannot be front run and there is an explanation as to why OR documented front running countermeasures are implemented.
No
The Oracle documentation identifies both source and timeframe, but does not provide additional context regarding smart contracts.

28. Can flashloan attacks be applied to the protocol, and if so, are those flashloan attack risks mitigated? (Y/N)

Answer: Yes

This protocol documents flashloan countermeasures at this location. It incentivises potential exploiters to focus on flashloan attacks in their bug bounty offering.

Score Guidance:
Yes
The protocol's documentation includes information on how they mitigate the possibilities and extents of flash loan attacks.
No
The protocol's documentation does not include any information regarding the mitigation of flash loan attacks.

Appendices

1/ SPDX-License-Identifier: MIT
2
3pragma solidity 0.6.11;
4
5import './Interfaces/IActivePool.sol';
6import "./Dependencies/SafeMath.sol";
7import "./Dependencies/Ownable.sol";
8import "./Dependencies/CheckContract.sol";
9import "./Dependencies/console.sol";
10
11/*
12 * The Active Pool holds the ETH collateral and LUSD debt (but not LUSD tokens) for all active troves.
13 *
14 * When a trove is liquidated, it's ETH and LUSD debt are transferred from the Active Pool, to either the
15 * Stability Pool, the Default Pool, or both, depending on the liquidation conditions.
16 *
17 */
18contract ActivePool is Ownable, CheckContract, IActivePool {
19    using SafeMath for uint256;
20
21    string constant public NAME = "ActivePool";
22
23    address public borrowerOperationsAddress;
24    address public troveManagerAddress;
25    address public stabilityPoolAddress;
26    address public defaultPoolAddress;
27    uint256 internal ETH;  // deposited ether tracker
28    uint256 internal LUSDDebt;
29
30    // --- Events ---
31
32    event BorrowerOperationsAddressChanged(address _newBorrowerOperationsAddress);
33    event TroveManagerAddressChanged(address _newTroveManagerAddress);
34    event ActivePoolLUSDDebtUpdated(uint _LUSDDebt);
35    event ActivePoolETHBalanceUpdated(uint _ETH);
36
37    // --- Contract setters ---
38
39    function setAddresses(
40        address _borrowerOperationsAddress,
41        address _troveManagerAddress,
42        address _stabilityPoolAddress,
43        address _defaultPoolAddress
44    )
45        external
46        onlyOwner
47    {
48        checkContract(_borrowerOperationsAddress);
49        checkContract(_troveManagerAddress);
50        checkContract(_stabilityPoolAddress);
51        checkContract(_defaultPoolAddress);
52
53        borrowerOperationsAddress = _borrowerOperationsAddress;
54        troveManagerAddress = _troveManagerAddress;
55        stabilityPoolAddress = _stabilityPoolAddress;
56        defaultPoolAddress = _defaultPoolAddress;
57
58        emit BorrowerOperationsAddressChanged(_borrowerOperationsAddress);
59        emit TroveManagerAddressChanged(_troveManagerAddress);
60        emit StabilityPoolAddressChanged(_stabilityPoolAddress);
61        emit DefaultPoolAddressChanged(_defaultPoolAddress);
62
63        _renounceOwnership();
64    }
65
66    // --- Getters for public variables. Required by IPool interface ---
67
68    /*
69    * Returns the ETH state variable.
70    *
71    *Not necessarily equal to the the contract's raw ETH balance - ether can be forcibly sent to contracts.
72    */
73    function getETH() external view override returns (uint) {
74        return ETH;
75    }
76
77    function getLUSDDebt() external view override returns (uint) {
78        return LUSDDebt;
79    }
80
81    // --- Pool functionality ---
82
83    function sendETH(address _account, uint _amount) external override {
84        _requireCallerIsBOorTroveMorSP();
85        ETH = ETH.sub(_amount);
86        emit ActivePoolETHBalanceUpdated(ETH);
87        emit EtherSent(_account, _amount);
88
89        (bool success, ) = _account.call{ value: _amount }("");
90        require(success, "ActivePool: sending ETH failed");
91    }
92
93    function increaseLUSDDebt(uint _amount) external override {
94        _requireCallerIsBOorTroveM();
95        LUSDDebt  = LUSDDebt.add(_amount);
96        ActivePoolLUSDDebtUpdated(LUSDDebt);
97    }
98
99    function decreaseLUSDDebt(uint _amount) external override {
100        _requireCallerIsBOorTroveMorSP();
101        LUSDDebt = LUSDDebt.sub(_amount);
102        ActivePoolLUSDDebtUpdated(LUSDDebt);
103    }
104
105    // --- 'require' functions ---
106
107    function _requireCallerIsBorrowerOperationsOrDefaultPool() internal view {
108        require(
109            msg.sender == borrowerOperationsAddress ||
110            msg.sender == defaultPoolAddress,
111            "ActivePool: Caller is neither BO nor Default Pool");
112    }
113
114    function _requireCallerIsBOorTroveMorSP() internal view {
115        require(
116            msg.sender == borrowerOperationsAddress ||
117            msg.sender == troveManagerAddress ||
118            msg.sender == stabilityPoolAddress,
119            "ActivePool: Caller is neither BorrowerOperations nor TroveManager nor StabilityPool");
120    }
121
122    function _requireCallerIsBOorTroveM() internal view {
123        require(
124            msg.sender == borrowerOperationsAddress ||
125            msg.sender == troveManagerAddress,
126            "ActivePool: Caller is neither BorrowerOperations nor TroveManager");
127    }
128
129    // --- Fallback function ---
130
131    receive() external payable {
132        _requireCallerIsBorrowerOperationsOrDefaultPool();
133        ETH = ETH.add(msg.value);
134        emit ActivePoolETHBalanceUpdated(ETH);
135    }
136}
N/A