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Security Audit
Nov 27, 2024
Version 1.0.0
Presented by 0xMacro
This document includes the results of the security audit for Seven Seas's smart contract code as found in the section titled ‘Source Code’. The security audit was performed by the Macro security team on Nov 27th, 2024.
The purpose of this audit is to review the source code of certain Seven Seas Solidity contracts, and provide feedback on the design, architecture, and quality of the source code with an emphasis on validating the correctness and security of the software in its entirety.
Disclaimer: While Macro’s review is comprehensive and has surfaced some changes that should be made to the source code, this audit should not solely be relied upon for security, as no single audit is guaranteed to catch all possible bugs.
The following is an aggregation of issues found by the Macro Audit team:
| Severity | Count | Acknowledged | Won't Do | Addressed |
|---|---|---|---|---|
| Medium | 1 | - | - | 1 |
Seven Seas was quick to respond to these issues.
Our understanding of the specification was based on the following sources:
AaveRewardsController: Is upgradeable so could potentially update logic and introduce vulnerabilities, caution is advised, however aave is a trusted entity across the ecosystem.
Lombard’s LBTC and cbBTCPMM: Both are upgradeable and owned by the same EOA owner, with recent updates and pending ownership transfers to a 3/5 safe. Caution is advised and we suggest waiting until ownership transfer occurs before moving funds in.
The following source code was reviewed during the audit:
c94d843a6e5d11b91f73f8e27c6b856d52ba8003
Specifically, we audited the AaveV3 and LombardBtc decoders, allowing boring vaults to claim rewards with AaveV3, as well as mint LBTC and swap CBBTC for LBTC. Changes reviewed from PR 161.
| Source Code | SHA256 |
|---|---|
| src/base/DecodersAndSanitizers/Protocols/LombardBtcMinterDecoderAndSanitizer.sol |
|
| src/base/DecodersAndSanitizers/Protocols/AaveV3DecoderAndSanitizer.sol |
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Note: This document contains an audit solely of the Solidity contracts listed above. Specifically, the audit pertains only to the contracts themselves, and does not pertain to any other programs or scripts, including deployment scripts.
Click on an issue to jump to it, or scroll down to see them all.
We quantify issues in three parts:
This third part – the severity level – is a summary of how much consideration the client should give to fixing the issue. We assign severity according to the table of guidelines below:
| Severity | Description |
|---|---|
|
(C-x) Critical |
We recommend the client must fix the issue, no matter what, because not fixing would mean significant funds/assets WILL be lost. |
|
(H-x) High |
We recommend the client must address the issue, no matter what, because not fixing would be very bad, or some funds/assets will be lost, or the code’s behavior is against the provided spec. |
|
(M-x) Medium |
We recommend the client to seriously consider fixing the issue, as the implications of not fixing the issue are severe enough to impact the project significantly, albiet not in an existential manner. |
|
(L-x) Low |
The risk is small, unlikely, or may not relevant to the project in a meaningful way. Whether or not the project wants to develop a fix is up to the goals and needs of the project. |
|
(Q-x) Code Quality |
The issue identified does not pose any obvious risk, but fixing could improve overall code quality, on-chain composability, developer ergonomics, or even certain aspects of protocol design. |
|
(I-x) Informational |
Warnings and things to keep in mind when operating the protocol. No immediate action required. |
|
(G-x) Gas Optimizations |
The presented optimization suggestion would save an amount of gas significant enough, in our opinion, to be worth the development cost of implementing it. |
scriptPubkey not validated allowing funds to be sent sent to any address
LombardBTCMinterDecoderAndSanitizer.sol’s [redeem()](https://github.com/Se7en-Seas/boring-vault/blob/c94d843a6e5d11b91f73f8e27c6b856d52ba8003/src/base/DecodersAndSanitizers/Protocols/LombardBtcMinterDecoderAndSanitizer.sol#L19-L22) is intended to pull out sensitive values to be validated in the merkle tree to verify if the vault can call redeem() on LBTC. The input value scriptPubkey is intended to be the BTC address that Bitcoin will be sent to in return for burning LBTC. Since LombardBTCMinterDecoderAndSanitizer.sol does not validate this value, if this function is allowed to be called via a vaults merkle tree, then a malicious strategist could enter a scriptPubkey for a address they control allowing LBTC in the vault to be taken.
This function is not intended to be setup in any vaults merkle tree’s but should be removed as it is a danger if it ever is added.
Remediations to Consider
Remove redeem() from LombardBTCMinterDecoderAndSanitizer.sol, since it could be used maliciously, additionally remove burn() as there is no reason to allow for burning and could be a griefing vector.
Macro makes no warranties, either express, implied, statutory, or otherwise, with respect to the services or deliverables provided in this report, and Macro specifically disclaims all implied warranties of merchantability, fitness for a particular purpose, noninfringement and those arising from a course of dealing, usage or trade with respect thereto, and all such warranties are hereby excluded to the fullest extent permitted by law.
Macro will not be liable for any lost profits, business, contracts, revenue, goodwill, production, anticipated savings, loss of data, or costs of procurement of substitute goods or services or for any claim or demand by any other party. In no event will Macro be liable for consequential, incidental, special, indirect, or exemplary damages arising out of this agreement or any work statement, however caused and (to the fullest extent permitted by law) under any theory of liability (including negligence), even if Macro has been advised of the possibility of such damages.
The scope of this report and review is limited to a review of only the code presented by the Seven Seas team and only the source code Macro notes as being within the scope of Macro’s review within this report. This report does not include an audit of the deployment scripts used to deploy the Solidity contracts in the repository corresponding to this audit. Specifically, for the avoidance of doubt, this report does not constitute investment advice, is not intended to be relied upon as investment advice, is not an endorsement of this project or team, and it is not a guarantee as to the absolute security of the project. In this report you may through hypertext or other computer links, gain access to websites operated by persons other than Macro. Such hyperlinks are provided for your reference and convenience only, and are the exclusive responsibility of such websites’ owners. You agree that Macro is not responsible for the content or operation of such websites, and that Macro shall have no liability to your or any other person or entity for the use of third party websites. Macro assumes no responsibility for the use of third party software and shall have no liability whatsoever to any person or entity for the accuracy or completeness of any outcome generated by such software.