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Background

// Security Assessment

05.21.2024 - 05.24.2024

Smart Contract Assessment

Moonwell

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← Back to Audits

Smart Contract Assessment - Moonwell

Prepared by:

Halborn Logo

HALBORN

Last Updated 03/11/2026

Date of Engagement: May 21st, 2024 - May 24th, 2024

Summary

100% of all REPORTED Findings have been addressed

All findings

4

Critical

0

High

0

Medium

1

Low

2

Informational

1

Table of Contents

  • 1. Introduction
  • 2. Assessment summary
  • 3. Test approach and methodology
  • 4. Risk methodology
  • 5. Scope
  • 6. Assessment summary & findings overview
  • 7. Findings & Tech Details
    1. 7.1 Vault deployment failure for void return tokens
    2. 7.2 Moonwellerc4626 returns max deposit denominated in shares
    3. 7.3 Claiming rewards depletes underlying when configured as an emission token
    4. 7.4 Susceptibility to inflation griefing for low precision decimals
  • 8. Automated Testing

1. Introduction

Moonwell engaged Halborn to conduct a security assessment on 4626 smart contracts beginning on 05/21/2024 and ending on 05/25/2024. The security assessment was scoped to the smart contracts provided to the Halborn team.

2. Assessment Summary

The team at Halborn dedicated 4 days for the engagement and assigned one full-time security engineer to evaluate 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 assessment 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 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 regarding the scope of this assessment. While manual testing is recommended to uncover flaws in logic, process, and implementation; automated testing techniques help enhance code coverage and 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.

    • Scanning of solidity files for vulnerabilities, security hot-spots or bugs. (MythX)

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

    • Testnet deployment. (Brownie, Anvil, Foundry)

4. 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 (mem_eme​)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 EEE is calculated using the following formula:

E=∏meE = \prod m_eE=∏me​

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 (mIm_ImI​)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 III is calculated using the following formula:

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

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

C=rsC = rsC=rs

The Vulnerability Severity Score SSS is obtained by:

S=min(10,EIC∗10)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

5. SCOPE

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

6. Assessment Summary & Findings Overview

Critical

0

High

0

Medium

1

Low

2

Informational

1

Security analysisRisk levelRemediation Date
Vault Deployment Failure For Void Return TokensMediumSolved - 05/22/2024
MoonwellERC4626 Returns Max Deposit Denominated In SharesLowSolved - 05/22/2024
Claiming Rewards Depletes Underlying When Configured As An Emission TokenLowRisk Accepted
Susceptibility To Inflation Griefing For Low Precision DecimalsInformationalAcknowledged

7. Findings & Tech Details

7.1 Vault Deployment Failure For Void Return Tokens

//

Medium

Description
Proof of Concept
BVSS
AO:A/AC:L/AX:L/C:N/I:N/A:M/D:N/Y:N/R:N/S:U (5.0)
Recommendation
Remediation Comment

7.2 MoonwellERC4626 Returns Max Deposit Denominated In Shares

//

Low

Description
BVSS
AO:A/AC:L/AX:L/C:N/I:L/A:L/D:N/Y:N/R:N/S:U (3.1)
Recommendation
Remediation Comment

7.3 Claiming Rewards Depletes Underlying When Configured As An Emission Token

//

Low

Description
BVSS
AO:S/AC:L/AX:L/C:N/I:N/A:N/D:C/Y:N/R:N/S:U (2.0)
Recommendation
Remediation Comment

7.4 Susceptibility To Inflation Griefing For Low Precision Decimals

//

Informational

Description
BVSS
AO:S/AC:L/AX:M/C:N/I:N/A:N/D:H/Y:N/R:N/S:U (1.0)
Recommendation
Remediation Comment

8. 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.

Table of Contents

  • 1. Introduction
  • 2. Assessment summary
  • 3. Test approach and methodology
  • 4. Risk methodology
  • 5. Scope
  • 6. Assessment summary & findings overview
  • 7. Findings & Tech Details
    1. 7.1 Vault deployment failure for void return tokens
    2. 7.2 Moonwellerc4626 returns max deposit denominated in shares
    3. 7.3 Claiming rewards depletes underlying when configured as an emission token
    4. 7.4 Susceptibility to inflation griefing for low precision decimals
  • 8. Automated Testing

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Smart Contract Assessment

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