Security Audit
July 1st, 2024
Version 1.0.0
Presented by 0xMacro
This document includes the results of the security audit for Superstate's smart contract code as found in the section titled ‘Source Code’. The security audit was performed by the Macro security team on June 18, 2024.
The purpose of this audit is to review the source code of certain Superstate 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 | 2 | - | 1 | 1 |
Code Quality | 4 | - | 1 | 3 |
Informational | 2 | - | - | - |
Superstate was quick to respond to these issues.
Our understanding of the specification was based on the following sources:
The following source code was reviewed during the audit:
71f267f408eeb50fcca7a182217814a8f02e77dc
94e20a411aa2d388cc358b802f60b556fd19d500
Specifically, we audited the following contracts within this repository:
Source Code | SHA256 |
---|
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. |
In the redeem()
function, when calculating the USDC
amount out in return for the ustbInAmount
input, the chainlink feed price for the USTB/USD pair is directly used as the USDC price, assuming a pegged exchange ratio with USD.
(bool isBadData,, uint256 usdPerUstbChainlinkRaw) = _getChainlinkPrice();
if (isBadData) revert BadChainlinkData();
// converts from a USTB amount to a USD amount, and then scales back up to a USDC amount
uint256 usdcOutAmount =
(ustbInAmount * usdPerUstbChainlinkRaw * USDC_PRECISION) / (CHAINLINK_FEED_PRECISION * USTB_PRECISION);
Reference: Redemption.sol#L177-182
However, in abnormal market conditions, this 1:1 ratio can change and has changed before, potentially allowing external actors to execute arbitrage operations and profit from this indirect hardcoded value. Depending on the direction of de-peg, actors could receive more USDC than they should, allowing them to profit from external opportunities or users could end up with a lower exchange rate than what they should have received.
Remediations to Consider
redeem()
and maxUstbRedemptionAmount()
.Superstate has a Circle mint account, where we can always redeem 1 USDC for 1 USD
In the _getChainlinkPrice()
function when performing validation, _isBadData
is determined using following expression:
(, int256 _answer,, uint256 _chainlinkUpdatedAt,) =
AggregatorV3Interface(CHAINLINK_FEED_ADDRESS).latestRoundData();
// If data is stale or below first price, set bad data to true and return
// 10_000_000 is $10.000000 in the oracle format, that was our starting NAV per Share price for USTB
// The oracle should never return a price much lower than this
_isBadData = _answer <= 7_000_000 || ((block.timestamp - _chainlinkUpdatedAt) > maximumOracleDelay);
Reference: Redemption.sol#L142-148
Part of the validation _answer <= 7_000_000
implicitly assumes that _answer
is a number with 6 decimal places of precision.
However, most of the non-ETH pairs return values with 8 decimal places of precision, while price feeds with ETH pairs have 18 decimal places of precision. As a result, if the USTB chainlink feed is indeed 8 decimal places of precision due to the incorrect assumption, this validation will be incorrect. For example, even if the result from the price feed is $0.08, it will still pass the validation.
Remediations to consider
CHAINLINK_FEED_PRECISION
for USTB feed when evaluating _answer
price data.Although the Redemption
contract can be indirectly paused or stopped by setting the maximumOracleDelay
to zero or withdrawing all assets as an admin, consider adding pause features and checks to allow admin control and user transparency on potential contract states and unwanted external financial scenarios where redemptions should not be executed.
In the _getChainlinPrice()
function, the answer value comparison is hard coded to 7_000_000 as safety insurance. Consider having a constant variable for this value to avoid having magic numbers.
Compound supports withdrawing the whole balance when type(uint256).max
is provided as an amount to withdraw. However, in the admin callable withdraw()
function, there is a validation that prevents this feature from being utilized:
if (balance < amount) revert InsufficientBalance();
Reference: Redemption.sol#L206
As a result, withdrawals of max amounts may leave dust amounts of USDC in the Compound contract.
Remediations to consider
COMPOUND
token and leave it to underlying Compound contract implementation to generate an error in case the requested amount is too big.In withdraw()
and deposit()
functions, corresponding Withdraw()
and Deposit()
events are emitted. Both of these events, when emitted, set withdrawer and depositor values to msg.sender
, which for both functions is unchangeable ADMIN
. Since no added value exists in including fixed values within events, consider removing withdrawer and depositor arguments from these two events.
Not an issue for us and may change in future version.
The Redemption contract integrates with Compound Comet contracts to supply and withdraw assets, generating yield with the USDC deposited in the contract and withdrawing it when users execute redeem()
. It is worth noticing that Compound contracts can pause both supply and withdrawal via the Pause guardian, a governance-elected entity. If paused, the contract will be stale, disallowing the user’s redemption and protocol’s deposit and withdrawals.
Since on-chain redemptions are available even when traditional markets are closed (e.g., weekends, holidays), any market-generating event that could reduce USTB's NAV on the following trading day could be a front-ran on-chain by the users through this redemption contract.
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 Superstate 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.