Moonwell Cross-Chain Governance - Moonwell

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.