Moonwell - MToken Fixes - Moonwell

1. Introduction

Moonwell engaged Halborn to conduct a security assessment on their smart contracts beginning on March 12th and ending on March 19th. The security assessment was scoped to the smart contracts provided in the moonwell-fi/mtoken-fixes GitHub repository. Commit hashes and further details can be found in the Scope section of this report.

2. Assessment Summary

Halborn was provided 1 week 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 informational, non-critical issues as described in this report.

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 handling of legacy Solidity versions, including using SafeMath and applying verifications to avoid arithmetic errors such as overflow and underflow.

- Access controls in functions that should only be called by the Governance are well-structured and provide an additional layer of security.

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