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Sommelier A-7

Security Audit

April 4, 2023

Version 1.0.0

Presented by 0xMacro

Table of Contents


This document includes the results of the security audit for Sommelier's smart contract code as found in the section titled ‘Source Code’. The security audit was performed by the Macro security team from March 27, 2023 to March 31, 2023.

The purpose of this audit is to review the source code of certain Sommelier 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.

Overall Assessment

The following is an aggregation of issues found by the Macro Audit team:

Severity Count Acknowledged Won't Do Addressed
Critical 2 - - 2
High 2 - - 2
Medium 1 1 - -
Code Quality 1 - - 1
Informational 1 1 - -

Sommelier was quick to respond to these issues.


Our understanding of the specification was based on the following sources:

Source Code

The following source code was reviewed during the audit:

Specifically, we audited the following contracts within this repository:

Contract SHA256








































Issue Descriptions and Recommendations

Click on an issue to jump to it, or scroll down to see them all.

Security Level Reference

We quantify issues in three parts:

  1. The high/medium/low/spec-breaking impact of the issue:
    • How bad things can get (for a vulnerability)
    • The significance of an improvement (for a code quality issue)
    • The amount of gas saved (for a gas optimization)
  2. The high/medium/low likelihood of the issue:
    • How likely is the issue to occur (for a vulnerability)
  3. The overall critical/high/medium/low severity of the issue.

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

We recommend the client must fix the issue, no matter what, because not fixing would mean significant funds/assets WILL be lost.


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.


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.


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.

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.


Warnings and things to keep in mind when operating the protocol. No immediate action required.

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.

Issue Details


Cellar can be drained by the multisig using a malicious priceRouter

Trust Model

In Registry.sol's setAddress(), the owner of the registry can set the address of the priceRouter. This priceRouter address is queried by each cellar and used to determine the price of each of its positions to determine the total asset value.

However, if the registry’s multisig is compromised, or the owners collude, they can set the price router address to be a malicious contract that inflates the value of a cellars assets, allowing them to withdraw all the cellars assets with minimal investment and setup.

Remediations to Consider

  • Each cellar should cache the price router address retrieved from the registry on deployment.
  • Add a function callable by governance that updates the cached price router address if the registry updates it. This ensures both the multisig and the governance need to be compromised before funds can be drained, offering more protection of cellars funds.

Approvals are not revoked leading to drained funds

Trust Model

In BaseAdaptor.sol's oracleSwap(), the cellar gives approval for a set asset to the swapRouter address provided by the registry and calls swap() on it.

PriceRouter priceRouter = PriceRouter(
// Approve swap router to swap assets.
assetIn.safeApprove(address(swapRouter), amountIn);
// Perform swap.
amountOut = swapRouter.swap(exchange, params, address(this), assetIn, assetOut);

As in the prior issue, the multisig can use setAddress() on Registry.sol to set the address of the swap router to be a malicious contract. In order to get around a cellar's callOnAdaptor's allowedRebalanceDeviation checks, the malicious swapRouter contract can implement the same swap interface, and return the expected values, but approvals to this contract are never revoked so it doesn't have to make any state changes, as it will maintain approvals after the transaction completes. Then in a separate transaction, the malicious contract can use these approvals to transfer the approved assets from the cellar.

Remediations to Consider

Revoke approvals given to the swapRouter after the swap and either

  • Set the swapRouter address as a constant so it cannot be maliciously changed.
  • Remove the swapping functionality from the baseRouter and turn it into a separate adaptor.

Protocol fees can be stolen by the registry multisig

Trust Model

In FeesAndReserves.sol's sendFees(), platform fees are sent to the gravity bridge address, retrieved by the registry, and sendToCosmos() is called with the feesDistributor address, also retrieved by the registry. Both these addresses can be changed in the registry by the multisig wallet, and can be done maliciously to steal all cellars platform fees.

Remediations to Consider

The gravityBridge and feesDistributor addresses are unlikely to change, so storing them in the FeesAndReserves contract, or as a constant in the Registry contract will prevent them from being changed maliciously.


FeesAndReserves multisig can set arbitrary feeEarned for cellars

Trust Model

In FeesAndReserves.sol’s performUpkeep() a check is done to see if the caller is the chainlink automationRegistry address, if so it will trust that the passed in performData is correct.

if (msg.sender != automationRegistry) {
    // Do not trust callers perform input data.
    Cellar target = performInput.cellar;

    if (address(metaData[target].reserveAsset) == address(0)) revert FeesAndReserves__CellarNotSetup();
    performInput = _calculateFees(target);
} else {
    if (address(metaData[performInput.cellar].reserveAsset) == address(0))
        revert FeesAndReserves__CellarNotSetup();
    // Make sure performInput is not stale.
    if (upkeepData.lastUpkeepTime > performInput.timestamp) revert FeesAndReserves__UpkeepTimeCheckFailed();

However, the owner of the FeesAndReserves contract can set the automationRegistry address to anything using setAutomationRegistry(). This allows arbitrary performance data to be accepted, and allowing the feeEarned for a given cellar to be inflated. This can allow a cellar to move the max funds of the rebalanceDeviation into the feesAndReserves contract, and allow them to withdraw it, with some fees going the the feesDistribution address. This can allow a slow rug pull to occur, or all assets held in reserve for a cellar to be pull out.

Remediations to Consider

  • Set automationRegistry to be constant.
  • Or require governance approval as well as multisig approval in order to change the automationRegistry address.

New cellars can be vulnerable to an inflation attack

Protocol Design

In cellarFactor.sol's deploy(), a initialDeposit param is passed in that, if non-zero, will deposit that amount into the newly deployed cellar and lock those shares in the cellarFactory contract.

if (initialDeposit > 0) {
    asset.safeTransferFrom(msg.sender, address(this), initialDeposit);
    asset.safeApprove(clone, initialDeposit);
    cellar.deposit(initialDeposit, address(this));

This is done to ensure there are some shares in the cellar, to help prevent a vault inflation attack on depositors. However, this initial deposit is optional and if not sufficiently large may still leave depositors vulnerable to the attack.

Remediations to Consider

  • Ensure that a suitable amount of funds are initially deposited and locked to minimize the impact of an inflation attack.
  • Or use a virtual offset to calculate shares minted, as suggested here, to minimize the impact of inflation attacks and prevent requiring funds to be locked in the cellar.
Response by Sommelier

While Cellar deployment is still handled by the Sommelier team, we will insure that initial deposits into our Cellars are of an appropriate size, to mitigate the attack.

Once Cellar deployment is handled by other 3rd parties, a mitigation like the ones listed in the report will be added to the Cellar code, to reduce deployment overhead for 3rd parties.


Unused import

Code Quality
Quality Impact

Cellar.sol imports Multicall.sol, but never uses it.


Issues found affect current cellars

Trust Model

Cellars currently in production can be affected by these issues, and the mitigation will differ from what is outlined above.

Suggested Steps

  • Adjust the multisig owner of the registry to require more signatures.
  • Add the new adaptors to the registry.
  • Make governance proposals to transition the affected cellars to the new adaptors.
  • Steward should prevent cellars from adding old positions.
  • Increase the minimum timelock of the multisig.
Response by Sommelier

To start to mitigate this finding, the multi-sig controlling the registry will be changed so it requires 4 of 7 signatures. Then once Real Yield USDs registry contract has been fully updated to use the newly audited adaptors, the Timelock contract will have its minimum delay changed from 3 days to 30 days.


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 Sommelier 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.