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Lido

92%

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Process Quality Review (0.8)

Lido

Final score:92%
Date:11 Apr 2022
Audit Process:version 0.8
Author:Nicolas Vyncke | NV
PQR Score:92%

PASS

Protocol Website:https://lido.fi/

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
Polygon
Solana
Terra
Kusama
#QuestionAnswer
100%
1.100%
2.100%
3.Yes
4.100%
5.100
91%
6.Yes
7.Yes
8.80%
9.100%
86%
10.100%
11.82%
12.Yes
13.100%
14.No
15.Yes
100%
16.100%
17.100%
79%
18.100%
19.100%
20.100%
21.100%
22.30%
23.80%
24.30%
25.100%
100%
26.100%
27.Yes
28.Yes
Total:92%

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.

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%

Lido's smart contract addresses can be found at https://docs.lido.fi/deployed-contracts, 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 DepositSecurityModule.sol is used on average 10 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

Location: https://github.com/lidofinance/lido-dao

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%

With 1,243 commits and 68 branches, Lido's main software repository is liquid gold.

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

Many public contributors can be found in Lido's GitHub at https://github.com/lidofinance/lido-dao/graphs/contributors.

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

91%

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.lido.fi/

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

Answer: Yes

Lido's software architecture is documented in https://docs.lido.fi/contracts/lido.

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: 80%

There is full coverage of Lido's most major deployed contracts by software function documentation. However, there are clearly a few missing as per their "Deployed Contracts" page.

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%

Lido provides direct and explicit traceability for all their key smart contracts. This can be seen as links that lead directly to a smart contract's source code, easily available at the top of each contract's page in the Lido docs.

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

86%

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 506% 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: 82%

Lido's last code coverage test was run around 7 days ago at the time of writing this review, and can be found here (must be signed in to GitHub to view). The average result is 82% 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/lidofinance/lido-dao/tree/master/scripts

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%

Lido has a very in-depth CI suite within the "Actions" tab of their LidoDAO software repository. It can be viewed here, but detailed logs can only be viewed once signed in.

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

Lido 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

Lido has been deployed to multiple testnets.

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

100%

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

16. Is the protocol sufficiently audited? (%)

Answer: 100%

Lido has been audited mutliple times pre and post deployment by MixBytes, SigmaPrime, and Quantstamp. Most issues underlined by the audit reports were fixed by the Lido team.

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: 100%

Lido offer three separate Immunefi bug bounties for three different chain deployments. All three offer rewards up to $2m, totaling $6m. Their mainnet program can be found here

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

79%

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%

Lido's admin control information is easily found and readily available in their docs.

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%

Lido uses an upgradeable proxy structure that allows their immutable smart contracts to update the state of these proxies. Since the implementation/logic/code that holds user funds is effectively immutable, and all upgrades are surface level parameter changes that must be voted on, we consider Lido as immutable and non-custodial - 100%. These details can be found here and 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 of the Lido contracts lie within the LidoDAO, and this is fully detailed here as well as here.

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%

All possible smart contract change capabilities of the Lido software is detailed here. A detailed list of parameters that can be voted upon by the DAO can be found in their Aragorn DAO interface.

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: 30%

Lido's admin control information clearly details their admin functions, but in software-related information that does not pertain to user investment safety.

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: 80%

Lido's pausing capabilities are clearly and extensively detailed here.

Percentage Score Guidance:
100%
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

24. Is there sufficient Timelock documentation? (%)

Answer: 30%

A timelock is identified here, but is not extensively detailed.

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%

The Lido timelock enforces a 72h lockup period.

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. These questions are explained in this document.

26. Is the protocol's Oracle sufficiently documented? (%)

Answer: 100%

Lido's oracle sources, dependent contracts, and software functions are all explained here. The refresh rates/timeframes of the oracle data feeds are documented here.

Percentage 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

Lido details their oracle's capabilities to "remove the ability to significantly change the price in a single block" here. Lido effectively does this by using "daemon oracles: that report to their overarching LidoOracle contract. This architecture effectively removes incentives from attempting sandwich/front running attacks by increasing the amount of data sources that would need to be exploited, which therefore makes it computationally intensive and expensive.

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

Lido applies the same architecture they use for mitigating sandwich attacks via oracles to their flash loan mitigation strategy. "Lido details their oracle's capabilities to "remove the ability to significantly change the price in a single block" here. Lido effectively does this by using "daemon oracles: that report to their overarching LidoOracle contract. This architecture effectively removes incentives from attempting sandwich/front running attacks by increasing the amount of data sources that would need to be exploited, which therefore makes it computationally intensive and expensive."

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/**
2* @title Liquid staking pool implementation
3*
4* Lido is an Ethereum 2.0 liquid staking protocol solving the problem of frozen staked Ethers
5* until transfers become available in Ethereum 2.0.
6* Whitepaper: https://lido.fi/static/Lido:Ethereum-Liquid-Staking.pdf
7*
8* NOTE: the code below assumes moderate amount of node operators, e.g. up to 50.
9*
10* Since balances of all token holders change when the amount of total pooled Ether
11* changes, this token cannot fully implement ERC20 standard: it only emits `Transfer`
12* events upon explicit transfer between holders. In contrast, when Lido oracle reports
13* rewards, no Transfer events are generated: doing so would require emitting an event
14* for each token holder and thus running an unbounded loop.
15*/
16contract Lido is ILido, IsContract, StETH, AragonApp {
17    using SafeMath for uint256;
18    using SafeMath64 for uint64;
19    using UnstructuredStorage for bytes32;
20
21    /// ACL
22    bytes32 constant public PAUSE_ROLE = keccak256("PAUSE_ROLE");
23    bytes32 constant public MANAGE_FEE = keccak256("MANAGE_FEE");
24    bytes32 constant public MANAGE_WITHDRAWAL_KEY = keccak256("MANAGE_WITHDRAWAL_KEY");
25    bytes32 constant public SET_ORACLE = keccak256("SET_ORACLE");
26    bytes32 constant public BURN_ROLE = keccak256("BURN_ROLE");
27    bytes32 constant public SET_TREASURY = keccak256("SET_TREASURY");
28    bytes32 constant public SET_INSURANCE_FUND = keccak256("SET_INSURANCE_FUND");
29    bytes32 constant public DEPOSIT_ROLE = keccak256("DEPOSIT_ROLE");
30
31    uint256 constant public PUBKEY_LENGTH = 48;
32    uint256 constant public WITHDRAWAL_CREDENTIALS_LENGTH = 32;
33    uint256 constant public SIGNATURE_LENGTH = 96;
34
35    uint256 constant public DEPOSIT_SIZE = 32 ether;
36
37    uint256 internal constant DEPOSIT_AMOUNT_UNIT = 1000000000 wei;
38
39    /// @dev default value for maximum number of Ethereum 2.0 validators registered in a single depositBufferedEther call
40    uint256 internal constant DEFAULT_MAX_DEPOSITS_PER_CALL = 150;
41
42    bytes32 internal constant FEE_POSITION = keccak256("lido.Lido.fee");
43    bytes32 internal constant TREASURY_FEE_POSITION = keccak256("lido.Lido.treasuryFee");
44    bytes32 internal constant INSURANCE_FEE_POSITION = keccak256("lido.Lido.insuranceFee");
45    bytes32 internal constant NODE_OPERATORS_FEE_POSITION = keccak256("lido.Lido.nodeOperatorsFee");
46
47    bytes32 internal constant DEPOSIT_CONTRACT_POSITION = keccak256("lido.Lido.depositContract");
48    bytes32 internal constant ORACLE_POSITION = keccak256("lido.Lido.oracle");
49    bytes32 internal constant NODE_OPERATORS_REGISTRY_POSITION = keccak256("lido.Lido.nodeOperatorsRegistry");
50    bytes32 internal constant TREASURY_POSITION = keccak256("lido.Lido.treasury");
51    bytes32 internal constant INSURANCE_FUND_POSITION = keccak256("lido.Lido.insuranceFund");
52
53    /// @dev amount of Ether (on the current Ethereum side) buffered on this smart contract balance
54    bytes32 internal constant BUFFERED_ETHER_POSITION = keccak256("lido.Lido.bufferedEther");
55    /// @dev number of deposited validators (incrementing counter of deposit operations).
56    bytes32 internal constant DEPOSITED_VALIDATORS_POSITION = keccak256("lido.Lido.depositedValidators");
57    /// @dev total amount of Beacon-side Ether (sum of all the balances of Lido validators)
58    bytes32 internal constant BEACON_BALANCE_POSITION = keccak256("lido.Lido.beaconBalance");
59    /// @dev number of Lido's validators available in the Beacon state
60    bytes32 internal constant BEACON_VALIDATORS_POSITION = keccak256("lido.Lido.beaconValidators");
61
62    /// @dev Credentials which allows the DAO to withdraw Ether on the 2.0 side
63    bytes32 internal constant WITHDRAWAL_CREDENTIALS_POSITION = keccak256("lido.Lido.withdrawalCredentials");
64
65    /**
66    * @dev As AragonApp, Lido contract must be initialized with following variables:
67    * @param depositContract official ETH2 Deposit contract
68    * @param _oracle oracle contract
69    * @param _operators instance of Node Operators Registry
70    */
71    function initialize(
72        IDepositContract depositContract,
73        address _oracle,
74        INodeOperatorsRegistry _operators,
75        address _treasury,
76        address _insuranceFund
77    )
78        public onlyInit
79    {
80        _setDepositContract(depositContract);
81        _setOracle(_oracle);
82        _setOperators(_operators);
83        _setTreasury(_treasury);
84        _setInsuranceFund(_insuranceFund);
85
86        initialized();
87    }
88
89    /**
90    * @notice Send funds to the pool
91    * @dev Users are able to submit their funds by transacting to the fallback function.
92    * Unlike vanilla Eth2.0 Deposit contract, accepting only 32-Ether transactions, Lido
93    * accepts payments of any size. Submitted Ethers are stored in Buffer until someone calls
94    * depositBufferedEther() and pushes them to the ETH2 Deposit contract.
95    */
96    function() external payable {
97        // protection against accidental submissions by calling non-existent function
98        require(msg.data.length == 0, "NON_EMPTY_DATA");
99        _submit(0);
100    }
101
102    /**
103    * @notice Send funds to the pool with optional _referral parameter
104    * @dev This function is alternative way to submit funds. Supports optional referral address.
105    * @return Amount of StETH shares generated
106    */
107    function submit(address _referral) external payable returns (uint256) {
108        return _submit(_referral);
109    }
110
111    /**
112    * @notice Deposits buffered ethers to the official DepositContract.
113    * @dev This function is separated from submit() to reduce the cost of sending funds.
114    */
115    function depositBufferedEther() external auth(DEPOSIT_ROLE) {
116        return _depositBufferedEther(DEFAULT_MAX_DEPOSITS_PER_CALL);
117    }
118
119    /**
120      * @notice Deposits buffered ethers to the official DepositContract, making no more than `_maxDeposits` deposit calls.
121      * @dev This function is separated from submit() to reduce the cost of sending funds.
122      */
123    function depositBufferedEther(uint256 _maxDeposits) external auth(DEPOSIT_ROLE) {
124        return _depositBufferedEther(_maxDeposits);
125    }
126
127    function burnShares(address _account, uint256 _sharesAmount)
128        external
129        authP(BURN_ROLE, arr(_account, _sharesAmount))
130        returns (uint256 newTotalShares)
131    {
132        return _burnShares(_account, _sharesAmount);
133    }
134
135    /**
136      * @notice Stop pool routine operations
137      */
138    function stop() external auth(PAUSE_ROLE) {
139        _stop();
140    }
141
142    /**
143      * @notice Resume pool routine operations
144      */
145    function resume() external auth(PAUSE_ROLE) {
146        _resume();
147    }

JavaScript Tests

Language
Files
Lines
Blanks
Comments
Testing Code
Deployed Code
Complexity
JavaScript
28
8769
1569
413
6787
1341
102

Tests to Code: 6787 / 1341 = 506 %