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Moonwell Cross-Chain Governance - Moonwell

Prepared by:

Halborn Logo

HALBORN

Last Updated Unknown date

Date of Engagement: February 16th, 2024 - March 12th, 2024

Summary

100% of all REPORTED Findings have been addressed

All findings

6

Critical

0

High

0

Medium

0

Low

2

Informational

4

Table of Contents

1. Introduction

Moonwell engaged Halborn to conduct a security assessment on their smart contracts beginning on February 16th and ending on March 12th. The security assessment was scoped to the smart contracts provided in the moonwell-fi/moonwell-contracts-v2 GitHub repository. Commit hashes and further details can be found in the Scope section of this report.

2. Assessment Summary

Halborn was provided 3.5 weeks for the engagement and assigned 1 full-time security engineer to review the security of the smart contracts in scope. The engineer is a blockchain and smart contract security expert with advanced penetration testing and smart contract hacking skills, and deep knowledge of multiple blockchain protocols.

The purpose of the assessment is to:

    • Identify potential security issues within the smart contracts.

    • Ensure that smart contract functionality operates as intended.

In summary, Halborn identified some security risks that were mostly addressed by the Moonwell team.

3. Test Approach and 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 assessment. While manual testing is recommended to uncover flaws in logic, process, and implementation; automated testing techniques help enhance coverage of the code and can quickly identify items that do not follow the security best practices. The following phases and associated tools were used during the assessment:

    • 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.

    • Static Analysis of security for scoped contract, and imported functions (slither).

    • Testnet deployment (Foundry).


4. Manual Testing

The contracts in scope were thoroughly and manually analyzed for potential vulnerabilities and bugs, as well as known optimizations and best practices when developing Smart Contracts in Solidity.

While no major vulnerabilities were found within the scope and time frame provided, it's always important to highlight good practices that were identified during the assessment, which contribute positively to the security maturity of the contracts in-scope, such as:

- Thorough documentation using NatSpec.

- Correct increment of i in for loops inside unchecked blocks for gas optimization.

- Pause mechanism (ConfigurablePauseGuardian contract and break glass functionality) implemented to protect the overall integrity of the ecosystem, protecting mission-critical functions to be called when the contracts are paused.

- The usage of Ownable2Step pattern is considered a good security practice and mitigates this risk by introducing a two-step process for ownership transfer. The current owner initiates the transfer by proposing a new owner, but the transfer only completes when the proposed new owner accepts it.

These security practices are applied industry-wide and should be considered in future implementations and developments.


4.1 Out-of-scope

    • External libraries and financial-related attacks.

    • New features/implementations after/with the remediation commit IDs.


5. 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.

5.1 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 (mem_e)METRIC VALUENUMERICAL VALUE
Attack Origin (AO)Arbitrary (AO:A)
Specific (AO:S)		1
0.2
Attack Cost (AC)Low (AC:L)
Medium (AC:M)
High (AC:H)		1
0.67
0.33
Attack Complexity (AX)Low (AX:L)
Medium (AX:M)
High (AX:H)		1
0.67
0.33
Exploitability EE is calculated using the following formula:

E=∏meE = \prod m_e

5.2 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 (mIm_I)METRIC VALUENUMERICAL VALUE
Confidentiality (C)None (C:N)
Low (C:L)
Medium (C:M)
High (C:H)
Critical (C:C)		0
0.25
0.5
0.75
1
Integrity (I)None (I:N)
Low (I:L)
Medium (I:M)
High (I:H)
Critical (I:C)		0
0.25
0.5
0.75
1
Availability (A)None (A:N)
Low (A:L)
Medium (A:M)
High (A:H)
Critical (A:C)		0
0.25
0.5
0.75
1
Deposit (D)None (D:N)
Low (D:L)
Medium (D:M)
High (D:H)
Critical (D:C)		0
0.25
0.5
0.75
1
Yield (Y)None (Y:N)
Low (Y:L)
Medium (Y:M)
High (Y:H)
Critical (Y:C)		0
0.25
0.5
0.75
1
Impact II is calculated using the following formula:

I=max(mI)+∑mI−max(mI)4I = max(m_I) + \frac{\sum{m_I} - max(m_I)}{4}

5.3 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 (CC)COEFFICIENT VALUENUMERICAL VALUE
Reversibility (rr)None (R:N)
Partial (R:P)
Full (R:F)		1
0.5
0.25
Scope (ss)Changed (S:C)
Unchanged (S:U)		1.25
1
Severity Coefficient CC is obtained by the following product:

C=rsC = rs

The Vulnerability Severity Score SS is obtained by:

S=min(10,EIC∗10)S = min(10, EIC * 10)

The score is rounded up to 1 decimal places.
SeverityScore Value Range
Critical9 - 10
High7 - 8.9
Medium4.5 - 6.9
Low2 - 4.4
Informational0 - 1.9

6. SCOPE

REPOSITORIES
(a) Repository: moonwell-contracts-v2
(b) Assessed Commit ID: 8e5cfe6
(c) Items in scope:
  • src/Governance/MultichainGovernor/MultichainGovernor.sol
  • src/Governance/MultichainGovernor/IMultichainGovernor.sol
  • src/Governance/MultichainGovernor/MultichainVoteCollection.sol
↓ Expand ↓
(a) Repository: moonwell-contracts-v2
(b) Assessed Commit ID: 8179be4
(c) Items in scope:
Out-of-Scope: New features/implementations after the remediation commit IDs.

7. Assessment Summary & Findings Overview

Critical

0

High

0

Medium

0

Low

2

Informational

4

Security analysisRisk levelRemediation Date
Cannot Grant Guardian Role After Kick Or UnpauseLowSolved - 03/12/2024
Wrong Event Emission On `_grantGuardian` FunctionLowSolved - 03/12/2024
Centralization Risk For Trusted OwnersInformationalAcknowledged - 03/11/2024
Lack Of Validations Can Brick Proposal StateInformationalAcknowledged - 03/11/2024
Use Custom ErrorsInformationalAcknowledged - 03/11/2024
Events Are Missing `indexed` AttributeInformationalAcknowledged - 03/11/2024

8. Findings & Tech Details

8.1 Cannot Grant Guardian Role After Kick Or Unpause

//

Low

Description
BVSS
Recommendation

8.2 Wrong Event Emission On `_grantGuardian` Function

//

Low

Description
BVSS
Recommendation

8.3 Centralization Risk For Trusted Owners

//

Informational

Description
BVSS
Recommendation

8.4 Lack Of Validations Can Brick Proposal State

//

Informational

Description
BVSS
Recommendation

8.5 Use Custom Errors

//

Informational

Description
BVSS
Recommendation
References

8.6 Events Are Missing `indexed` Attribute

//

Informational

Description
BVSS
Recommendation
References
https://docs.soliditylang.org/en/v0.8.24/contracts.html#events
https://docs.soliditylang.org/en/v0.8.24/abi-spec.html#events

9. Automated Testing

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.

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Moonwell Cross-Chain Governance

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