Prepared by:
HALBORN
Last Updated 04/26/2024
Date of Engagement by: August 16th, 2022 - August 24th, 2022
Summary
100% of all REPORTED Findings have been addressed
All findings
2
Critical
0
High
0
Medium
0
Low
0
Informational
2
Table of Contents
1. INTRODUCTION
NFTfi engaged Halborn to conduct a security audit on their smart contracts beginning on 2022-08-16 and ending on 2022-08-24. The security assessment was scoped to the smart contracts provided to the Halborn team.
2. AUDIT SUMMARY
The team at Halborn was provided two weeks for the engagement and assigned a full-time security engineer to audit the security of the smart contract. The security engineer is a blockchain and smart-contract security expert with advanced penetration testing, smart-contract hacking, and deep knowledge of multiple blockchain protocols.
The purpose of this audit is to:
Ensure that smart contract functions operate as intended
Identify potential security issues with the smart contracts
In summary, Halborn identified some security risks that were acknowledged by the NFTfi team.
3. TEST APPROACH & METHODOLOGY
Halborn performed a combination of manual and automated security testing to balance efficiency, timeliness, practicality, and accuracy in regard to the scope of this audit. While manual testing is recommended to uncover flaws in logic, process, and implementation; automated testing techniques help enhance coverage of the bridge code and can quickly identify items that do not follow security best practices. The following phases and associated tools were used throughout the term of the audit:
Research into architecture and purpose
Smart contract manual code review and walkthrough
Graphing out functionality and contract logic/connectivity/functions. (
solgraph)Manual assessment of use and safety for the critical Solidity variables and functions in scope to identify any arithmetic related vulnerability classes
Manual testing by custom scripts
Scanning of solidity files for vulnerabilities, security hotspots or bugs. (
MythX)Static Analysis of security for scoped contract, and imported functions. (
Slither)Testnet deployment (
Brownie,Remix IDE,Visual Studio Code)
4. SCOPE
IN-SCOPE: The security assessment was scoped to the Collection Offer smart contract, NFTfi audit-collection-offer-28-07-2022 branch:
DirectLoanFixedCollectionOffer.sol
Commit ID: 6c6fce28f47128d0410fb195142388bdf9e72763
The NFTfi's loan solution was already tested twice:
in November 2021 (NFTfi develop-v2.1-audit branch contracts)
in March 2022 (NFTfi v2.2-07-03-2022-audit)
OUT-OF-SCOPE: Other smart contracts in the repository, external libraries and economical attacks.
5. RISK METHODOLOGY
- 5 - Almost certain an incident will occur.
- 4 - High probability of an incident occurring.
- 3 - Potential of a security incident in the long term.
- 2 - Low probability of an incident occurring.
- 1 - Very unlikely issue will cause an incident.
- 5 - May cause devastating and unrecoverable impact or loss.
- 4 - May cause a significant level of impact or loss.
- 3 - May cause a partial impact or loss to many.
- 2 - May cause temporary impact or loss.
- 1 - May cause minimal or un-noticeable impact.
- 10 - CRITICAL
- 9 - 8 - HIGH
- 7 - 6 - MEDIUM
- 5 - 4 - LOW
- 3 - 1 - VERY LOW AND INFORMATIONAL
6. SCOPE
7. Assessment Summary & Findings Overview
Critical
0
High
0
Medium
0
Low
0
Informational
2
Impact x Likelihood
HAL-01
HAL-02
| Security analysis | Risk level | Remediation Date |
|---|---|---|
| GAS OVER-CONSUMPTION IN LOOPS | Informational | Acknowledged |
| SOLC 0.8.4 COMPILER VERSION CONTAINS MULTIPLE BUGS | Informational | Acknowledged |
8. Findings & Tech Details
8.1 GAS OVER-CONSUMPTION IN LOOPS
// Informational
Description
In all the loops, the counter variable is incremented using i++. It is known that, in loops, using ++i costs less gas per iteration than i++.
Code Location
DirectLoanBaseMinimal.sol
- Line 305:
for (uint256 i = 0; i < _permittedErc20s.length; i++) { - Line 374:
for (uint256 i = 0; i < _erc20s.length; i++) {
For example, based in the following test contract:
Test.sol
//SPDX-License-Identifier: MIT
pragma solidity 0.8.9;
contract test {
function postiincrement(uint256 iterations) public {
for (uint256 i = 0; i < iterations; i++) {
}
}
function preiincrement(uint256 iterations) public {
for (uint256 i = 0; i < iterations; ++i) {
}
}
}
We can see the difference in the gas costs:
Score
Likelihood: 1
Recommendation
ACKNOWLEDGED: The \client team acknowledged this issue.
8.2 SOLC 0.8.4 COMPILER VERSION CONTAINS MULTIPLE BUGS
// Informational
Description
Presently, the smart contracts have configured the floating pragma set to ^0.8.0 or fixed pragma to 0.8.4 (e.g. DirectLoanFixedCollectionOffer.sol). The latest solidity compiler version 0.8.16 fixed important bugs in the compiler. The version 0.8.4 is missing all these fixes: 0.8.9, 0.8.13, 0.8.14, 0.8.15, 0.8.16.
The official Solidity's recommendations are: when deploying contracts, you should use the latest released version of Solidity. Apart from exceptional cases, only the latest version receives security fixes.
Score
Likelihood: 1
Recommendation
ACKNOWLEDGED: The \client team acknowledged this issue.
9. Review Notes
Halborn performed several manual tests in the DirectLoanFixedCollectionOffer.sol contract:
The manual tests were focused on testing the main functions of this contract:
acceptOffer()getPayoffAmount()updateMaximumLoanDuration()updateAdminFee()drainERC20Airdrop()setERC20Permit()setERC20Permits()drainERC721Airdrop()drainERC1155Airdrop()mintObligationReceipt()renegotiateLoan()payBackLoan()liquidateOverdueLoan()pullAirdrop()wrapCollateral()cancelLoanCommitmentBeforeLoanHasBegun()getWhetherNonceHasBeenUsedForUser()getERC20Permit()
No significant issues were found during the manual tests.
10. Automated Testing
STATIC ANALYSIS REPORT
Description
Halborn used automated testing techniques to enhance the coverage of certain areas of the scoped contracts. Among the tools used was Slither, a Solidity static analysis framework. After Halborn verified all the contracts in the repository and was able to compile them correctly into their ABI and binary formats, Slither was run on the all-scoped contracts. This tool can statically verify mathematical relationships between Solidity variables to detect invalid or inconsistent usage of the contracts' APIs across the entire code-base.
Slither results
DirectLoanFixedCollectionOffer.sol
The reentrancy issues identified are false positives.
Some identified issues are related to OppenZepplin's libraries.
The dangerous comparison instances are false positives.
The uses inline assembly findings are false positives.
Pragma usage with old version was reported in
SOLC 0.8.4 COMPILER VERSION CONTAINS MULTIPLE BUGS.Several informational issues related to solidity naming convention were identified.
No major issues were found by Slither.
AUTOMATED SECURITY SCAN
Description
Halborn used automated security scanners to assist with detection of well-known security issues, and to identify low-hanging fruits on the targets for this engagement. Among the tools used was MythX, a security analysis service for Ethereum smart contracts. MythX performed a scan on all the contracts and sent the compiled results to the analyzers to locate any vulnerabilities.
MythX results
DirectLoanFixedCollectionOffer.sol
Majority of identified issues are related to OppenZepplin's libraries.
The identified arithmetic operations or assert violations are false positives.
No major issues were found by Mythx.
Halborn strongly recommends conducting a follow-up assessment of the project either within six months or immediately following any material changes to the codebase, whichever comes first. This approach is crucial for maintaining the project’s integrity and addressing potential vulnerabilities introduced by code modifications.
Table of Contents
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