Finance Contracts Audit | Bonzo Finance

Summary

100% of all REPORTED Findings have been addressed

About this report

Assessment Type

Assurance Assessment

Date of Engagement

June 24th, 2024 - July 5th, 2024

Source Code

bonzo-finance-contracts

Assessed Commit ID

3b3de0b

Severity Breakdown

0Risk Accepted
2Acknowledged
9Solved
11All Findings

Critical4
- 4Solved
High0
Medium1
- 1Solved
Low1
- 1Solved
Informational5
- 2Ack.
- 3Solved

Introduction#

Bonzo engaged our security analysis team to conduct a comprehensive security audit of their smart contract ecosystem. The primary aim was to meticulously assess the security architecture of the smart contracts to pinpoint vulnerabilities, evaluate existing security protocols, and offer actionable insights to bolster security and operational efficacy of their smart contract framework. Our assessment was strictly confined to the smart contracts provided, ensuring a focused and exhaustive analysis of their security features.

Assessment Summary#

Our engagement with Bonzo spanned a 1.5-week period, during which we dedicated one full-time security engineer equipped with extensive experience in blockchain security, advanced penetration testing capabilities, and profound knowledge of various blockchain protocols. The objectives of this assessment were to:

- Verify the correct functionality of smart contract operations.

- Identify potential security vulnerabilities within the smart contracts.

- Provide recommendations to enhance the security and efficiency of the smart contracts.

Test Approach and Methodology#

Our testing strategy employed a blend of manual and automated techniques to ensure a thorough evaluation. While manual testing was pivotal for uncovering logical and implementation flaws, automated testing offered broad code coverage and rapid identification of common vulnerabilities. The testing process included:

- A detailed examination of the smart contracts' architecture and intended functionality.

- Comprehensive manual code reviews and walkthroughs.

- Functional and connectivity analysis utilizing tools like Solgraph.

- Customized script-based manual testing and testnet deployment using Foundry.

This executive summary encapsulates the pivotal findings and recommendations from our security assessment of Bonzo's smart contract ecosystem. By addressing the identified issues and implementing the recommended fixes, Bonzo can significantly boost the security, reliability, and trustworthiness of its smart contract platform.

Risk Methodology#

Every vulnerability and issue observed by Halborn is ranked based on two sets of Metrics and a Severity Coefficient. This system is inspired by the industry standard Common Vulnerability Scoring System.

The two Metric sets are: Exploitability and Impact. Exploitability captures the ease and technical means by which vulnerabilities can be exploited and Impact describes the consequences of a successful exploit.

The Severity Coefficients is designed to further refine the accuracy of the ranking with two factors: Reversibility and Scope. These capture the impact of the vulnerability on the environment as well as the number of users and smart contracts affected.

The final score is a value between 0-10 rounded up to 1 decimal place and 10 corresponding to the highest security risk. This provides an objective and accurate rating of the severity of security vulnerabilities in smart contracts.

The system is designed to assist in identifying and prioritizing vulnerabilities based on their level of risk to address the most critical issues in a timely manner.

4.1 EXPLOITABILITY

Attack Origin (AO):

Captures whether the attack requires compromising a specific account.

Attack Cost (AC):

Captures the cost of exploiting the vulnerability incurred by the attacker relative to sending a single transaction on the relevant blockchain. Includes but is not limited to financial and computational cost.

Attack Complexity (AX):

Describes the conditions beyond the attacker’s control that must exist in order to exploit the vulnerability. Includes but is not limited to macro situation, available third-party liquidity and regulatory challenges.

Metrics:

EXPLOITABILITY METRIC ( $m_e$ )	METRIC VALUE	NUMERICAL VALUE
Attack Origin (AO)	Arbitrary (AO:A)	1
Attack Origin (AO)	Specific (AO:S)	0.2
Attack Cost (AC)	Low (AC:L)	1
	Medium (AC:M)	0.67
	High (AC:H)	0.33
Attack Complexity (AX)	Low (AX:L)	1
	Medium (AX:M)	0.67
	High (AX:H)	0.33

Exploitability

E

is calculated using the following formula:

$E = \prod m_e$

4.2 IMPACT

Confidentiality (C):

Measures the impact to the confidentiality of the information resources managed by the contract due to a successfully exploited vulnerability. Confidentiality refers to limiting access to authorized users only.

Integrity (I):

Measures the impact to integrity of a successfully exploited vulnerability. Integrity refers to the trustworthiness and veracity of data stored and/or processed on-chain. Integrity impact directly affecting Deposit or Yield records is excluded.

Availability (A):

Measures the impact to the availability of the impacted component resulting from a successfully exploited vulnerability. This metric refers to smart contract features and functionality, not state. Availability impact directly affecting Deposit or Yield is excluded.

Deposit (D):

Measures the impact to the deposits made to the contract by either users or owners.

Yield (Y):

Measures the impact to the yield generated by the contract for either users or owners.

Metrics:

IMPACT METRIC ( $m_I$ )	METRIC VALUE	NUMERICAL VALUE
Confidentiality (C)	None (C:N)	0
	Low (C:L)	0.25
	Medium (C:M)	0.5
	High (C:H)	0.75
	Critical (C:C)	1
Integrity (I)	None (I:N)	0
	Low (I:L)	0.25
	Medium (I:M)	0.5
	High (I:H)	0.75
	Critical (I:C)	1
Availability (A)	None (A:N)	0
	Low (A:L)	0.25
	Medium (A:M)	0.5
	High (A:H)	0.75
	Critical (A:C)	1
Deposit (D)	None (D:N)	0
	Low (D:L)	0.25
	Medium (D:M)	0.5
	High (D:H)	0.75
	Critical (D:C)	1
Yield (Y)	None (Y:N)	0
	Low (Y:L)	0.25
	Medium (Y:M)	0.5
	High (Y:H)	0.75
	Critical (Y:C)	1

Impact

I

is calculated using the following formula:

$I = max(m_I) + \frac{\sum{m_I} - max(m_I)}{4}$

4.3 SEVERITY COEFFICIENT

Reversibility (R):

Describes the share of the exploited vulnerability effects that can be reversed. For upgradeable contracts, assume the contract private key is available.

Scope (S):

Captures whether a vulnerability in one vulnerable contract impacts resources in other contracts.

Metrics:

SEVERITY COEFFICIENT ( $C$ )	COEFFICIENT VALUE	NUMERICAL VALUE
Reversibility ( $r$ )	None (R:N)	1
	Partial (R:P)	0.5
	Full (R:F)	0.25
Scope ( $s$ )	Changed (S:C)	1.25
Scope ( $s$ )	Unchanged (S:U)	1

Severity Coefficient

C

is obtained by the following product:

$C = rs$

The Vulnerability Severity Score

S

is obtained by:

$S = min(10, EIC * 10)$

The score is rounded up to 1 decimal places.

Critical	High	Medium	Low	Informational
9 - 10	7 - 8.9	4.5 - 6.9	2 - 4.4	0 - 1.9

Scope#

(a) Repository:bonzo-finance-contracts

(b) Assessed Commit ID:3b3de0bb3746e0492140401e6cad77e4d0f44ca1

14 files

contracts

14 files

misc / WHBAR

6 files

Bits.sol

solidity

HederaResponseCodes.sol

solidity

HederaTokenService.sol

solidity

SafeCast.sol

solidity

SafeHederaTokenService.sol

solidity

WHBARContract.sol

solidity

protocol

4 files

lendingpool

3 files

LendingPool.sol

solidity

LendingPoolConfigurator.sol

solidity

Out-of-Scope: New features/implementations after the remediation commit IDs.

Assessment Summary & Findings Overview#

#	Title	Severity	Score	Status
HAL-01	Incorrect asset handling during withdraw	Critical	10.0	Solved07/22/2024
HAL-02	Incorrect asset handling during executeBorrow	Critical	10.0	Solved07/22/2024
HAL-03	Stable Rate Mode Critical Bug	Critical	10.0	Solved07/23/2024
HAL-04	Price Inflation in AToken	Critical	9.4	Solved07/22/2024
HAL-05	Unsafe Modification of Decimals in LendingPoolConfigurator	Medium	4.7	Solved07/22/2024
HAL-06	Lack of Two-step Ownership Transfer and Unsafe renounceOwnership	Low	2.8	Solved07/22/2024
HAL-07	Suboptimal Handling of WHBAR Variables and Deployment	Informational	0.8	Acknowledged
HAL-08	Duplicate HederaTokenService Contracts	Informational	0.5	Solved07/22/2024
HAL-09	Inconsistent return handling in redirectForToken	Informational	0.5	Solved07/22/2024
HAL-10	Suboptimal Contract Design for getDecimals	Informational	0.0	Solved07/22/2024
HAL-11	Suboptimal Token Association and Transfer Mechanism in AToken	Informational	0.0	Acknowledged

Remediation Comment

8. Automated Testing#

Disclaimer#

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.