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Saddle Finance

81%

Process Quality Review (0.8)

Saddle Finance

Final score:81%
Date:22 Feb 2022
Audit Process:version 0.8
Author:Nick
PQR Score:96%

-15%(Penalty)

PASS

Hack History

Date:30 Apr 2022
Details: On April 30th, 2022, Saddle Finance was hacked for $11m. This hack was made possible through the presence of a vulnerability within an old MetSwapUtils library, which was [documented by the team](https://blog.saddle.finance/metapool-exploit-fix-is-live/), and from which the protocol has since migrated away from. However, the protocol's swap calculations still pointed to the vulnerable old library instead of the new one. As such, the exploiter was able to manipulate the calculation of the value of the LP token during metapool swaps through a flash loan attack and repeatedly swap out/harvest stablecoins before the pool could do proper calculations.
Reference Linklink

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
Ethereum
Fantom
Optimism
#QuestionAnswer
97%
1.100%
2.70%
3.Yes
4.100%
5.100
100%
6.Yes
7.Yes
8.100%
9.100%
87%
10.100%
11.99%
12.Yes
13.70%
14.No
15.Yes
96%
16.100%
17.70%
97%
18.100%
19.100%
20.100%
21.100%
22.100%
23.80%
24.100%
25.100%
100%
26.100%
27.Yes
28.Yes
Total:96%

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

97%

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%

Contracts are easily found.

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: 70%

Contracts are interacted with more than 10 times a week.

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

Saddle uses GitHub

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 296 commits, it's clear this development team has worn in their saddle when it comes to development history.

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: 100

Two public team members contribute to Saddle's repository and independently confirm via LinkedIn their employment at Saddle.

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

Saddle has a whitepaper.

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

Answer: Yes

Saddle has great software architecture documentation at https://docs.saddle.finance/solidity-docs/stakeabletokenwrapper.

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%

Deployed contracts are documented [extensively.]https://docs.saddle.finance/solidity-docs/swap)

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 association between code and documentation with explicit traceability.

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

87%

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

Answer: 100%

At 426% TtC, Saddle has done substantial testing on its smart contracts.

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: 99%

GitHub reports 99% 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 are provided.

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: 70%

No report was found, but with 99% code coverage this protocol earns 70%.

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. It plans to in the near future - this score will be updated accordlingly.

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

Saddle documents Ropsten usage.

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%

Saddle was audited 3 times before release.

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%

Saddle offer $100k using an active program. Saddle should be commended for recently doubling the value of this bug bounty.

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

97%

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 is easy to find.

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%

All contracts are clearly labelled as immutable.

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 in the Gnosis Safe.

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%

Contracts are 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 in comprehensible 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: 80%

There is a pause control mentioned with good elaboration. There is no evidence of testing.

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: 100%

There is no timelock needed.

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%

No timelock is deemed necessary.

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%

Saddle does not use an oracle, and this is justified 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

Front running countermeasures are detailed.

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

Saddle uses flashloans as a part of its offering, meaning countermeasures are not needed.

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

1pragma solidity 0.6.12;
2
3import "./SwapV1.sol";
4import "./interfaces/IFlashLoanReceiver.sol";
5
6/**
7 * @title Swap - A StableSwap implementation in solidity.
8 * @notice This contract is responsible for custody of closely pegged assets (eg. group of stablecoins)
9 * and automatic market making system. Users become an LP (Liquidity Provider) by depositing their tokens
10 * in desired ratios for an exchange of the pool token that represents their share of the pool.
11 * Users can burn pool tokens and withdraw their share of token(s).
12 *
13 * Each time a swap between the pooled tokens happens, a set fee incurs which effectively gets
14 * distributed to the LPs.
15 *
16 * In case of emergencies, admin can pause additional deposits, swaps, or single-asset withdraws - which
17 * stops the ratio of the tokens in the pool from changing.
18 * Users can always withdraw their tokens via multi-asset withdraws.
19 *
20 * @dev Most of the logic is stored as a library `SwapUtils` for the sake of reducing contract's
21 * deployment size.
22 */
23contract SwapFlashLoanV1 is SwapV1 {
24    // Total fee that is charged on all flashloans in BPS. Borrowers must repay the amount plus the flash loan fee.
25    // This fee is split between the protocol and the pool.
26    uint256 public flashLoanFeeBPS;
27    // Share of the flash loan fee that goes to the protocol in BPS. A portion of each flash loan fee is allocated
28    // to the protocol rather than the pool.
29    uint256 public protocolFeeShareBPS;
30    // Max BPS for limiting flash loan fee settings.
31    uint256 public constant MAX_BPS = 10000;
32
33    /*** EVENTS ***/
34    event FlashLoan(
35        address indexed receiver,
36        uint8 tokenIndex,
37        uint256 amount,
38        uint256 amountFee,
39        uint256 protocolFee
40    );
41
42    /**
43     * @notice Initializes this Swap contract with the given parameters.
44     * This will also clone a LPToken contract that represents users'
45     * LP positions. The owner of LPToken will be this contract - which means
46     * only this contract is allowed to mint/burn tokens.
47     *
48     * @param _pooledTokens an array of ERC20s this pool will accept
49     * @param decimals the decimals to use for each pooled token,
50     * eg 8 for WBTC. Cannot be larger than POOL_PRECISION_DECIMALS
51     * @param lpTokenName the long-form name of the token to be deployed
52     * @param lpTokenSymbol the short symbol for the token to be deployed
53     * @param _a the amplification coefficient * n * (n - 1). See the
54     * StableSwap paper for details
55     * @param _fee default swap fee to be initialized with
56     * @param _adminFee default adminFee to be initialized with
57     * @param _withdrawFee default withdrawFee to be initialized with
58     * @param lpTokenTargetAddress the address of an existing LPToken contract to use as a target
59     */
60    function initialize(
61        IERC20[] memory _pooledTokens,
62        uint8[] memory decimals,
63        string memory lpTokenName,
64        string memory lpTokenSymbol,
65        uint256 _a,
66        uint256 _fee,
67        uint256 _adminFee,
68        uint256 _withdrawFee,
69        address lpTokenTargetAddress
70    ) public virtual override initializer {
71        SwapV1.initialize(
72            _pooledTokens,
73            decimals,
74            lpTokenName,
75            lpTokenSymbol,
76            _a,
77            _fee,
78            _adminFee,
79            _withdrawFee,
80            lpTokenTargetAddress
81        );
82        flashLoanFeeBPS = 8; // 8 bps
83        protocolFeeShareBPS = 0; // 0 bps
84    }
85
86    /*** STATE MODIFYING FUNCTIONS ***/
87
88    /**
89     * @notice Borrow the specified token from this pool for this transaction only. This function will call
90     * `IFlashLoanReceiver(receiver).executeOperation` and the `receiver` must return the full amount of the token
91     * and the associated fee by the end of the callback transaction. If the conditions are not met, this call
92     * is reverted.
93     * @param receiver the address of the receiver of the token. This address must implement the IFlashLoanReceiver
94     * interface and the callback function `executeOperation`.
95     * @param token the protocol fee in bps to be applied on the total flash loan fee
96     * @param amount the total amount to borrow in this transaction
97     * @param params optional data to pass along to the callback function
98     */
99    function flashLoan(
100        address receiver,
101        IERC20 token,
102        uint256 amount,
103        bytes memory params
104    ) external nonReentrant {
105        uint8 tokenIndex = getTokenIndex(address(token));
106        uint256 availableLiquidityBefore = token.balanceOf(address(this));
107        uint256 protocolBalanceBefore = availableLiquidityBefore.sub(
108            swapStorage.balances[tokenIndex]
109        );
110        require(
111            amount > 0 && availableLiquidityBefore >= amount,
112            "invalid amount"
113        );
114
115        // Calculate the additional amount of tokens the pool should end up with
116        uint256 amountFee = amount.mul(flashLoanFeeBPS).div(10000);
117        // Calculate the portion of the fee that will go to the protocol
118        uint256 protocolFee = amountFee.mul(protocolFeeShareBPS).div(10000);
119        require(amountFee > 0, "amount is small for a flashLoan");
120
121        // Transfer the requested amount of tokens
122        token.safeTransfer(receiver, amount);
123
124        // Execute callback function on receiver
125        IFlashLoanReceiver(receiver).executeOperation(
126            address(this),
127            address(token),
128            amount,
129            amountFee,
130            params
131        );
132
133        uint256 availableLiquidityAfter = token.balanceOf(address(this));
134        require(
135            availableLiquidityAfter >= availableLiquidityBefore.add(amountFee),
136            "flashLoan fee is not met"
137        );
138
139        swapStorage.balances[tokenIndex] = availableLiquidityAfter
140            .sub(protocolBalanceBefore)
141            .sub(protocolFee);
142        emit FlashLoan(receiver, tokenIndex, amount, amountFee, protocolFee);
143    }
144
145    /*** ADMIN FUNCTIONS ***/
146
147    /**
148     * @notice Updates the flash loan fee parameters. This function can only be called by the owner.
149     * @param newFlashLoanFeeBPS the total fee in bps to be applied on future flash loans
150     * @param newProtocolFeeShareBPS the protocol fee in bps to be applied on the total flash loan fee
151     */
152    function setFlashLoanFees(
153        uint256 newFlashLoanFeeBPS,
154        uint256 newProtocolFeeShareBPS
155    ) external onlyOwner {
156        require(
157            newFlashLoanFeeBPS > 0 &&
158                newFlashLoanFeeBPS <= MAX_BPS &&
159                newProtocolFeeShareBPS <= MAX_BPS,
160            "fees are not in valid range"
161        );
162        flashLoanFeeBPS = newFlashLoanFeeBPS;
163        protocolFeeShareBPS = newProtocolFeeShareBPS;
164    }
165}
N/A