Amp

1 Executive Summary

This report presents the results of our engagement with Flexa to review Amp Token and Flexa Collateral Manager. Flexa is a payment network, using smart contract and Amp collateral to facilitate off-chain payments.

The review was conducted over the course of two weeks, from June 9, 2020 to June 19, 2020 by Shayan Eskandari and Valentin Wüstholz. A total of 15 person-days were spent.

The review of the initial report fixes were performed from August 10, 2020 to August 14, 2020 by Shayan Eskandari.

2 Scope

Our review focused on the commit hash 4203e96d1138632a991d072d0c232fd8ba69c9e1 for amp-contracts, and 4203e96d1138632a991d072d0c232fd8ba69c9e1 for flexa-collateral-manager. The list of files in scope can be found in the Appendix.

Update: The final review of the initial report fixes were done on the commit hash aece0f6b24df6348221da548a815528a6633a20e for amp-token-contracts, and 8d421c295c2ed5d3eef12e5992d96efb8d10d2d3 for flexa-collateral-manager.

2.1 Objectives

Together with the the Flexa team, we identified the following priorities for our review:

1. Ensure that the system is implemented consistently with the intended functionality, and without unintended edge cases.
2. Identify known vulnerabilities particular to smart contract systems, as outlined in our Smart Contract Best Practices, and the Smart Contract Weakness Classification Registry.

The second review was mainly a check for the fixes of the issues filed in the initial report. The rest of the text in this report reflects the initial review unless explicitly tagged as Update.

3 System Overview

The following figure is a visualization of the actors and the overview of Flexa Collateral Manager with Amp Token:

Many of the internal calls to view/pure functions and details regarding partitions are removed from this chart for more readability.

The Actors and their permissions in the system are described in Security specification section.

4 Security Specification

This section describes, from a security perspective, the expected behavior of the system under audit. It is not a substitute for documentation. The purpose of this section is to identify specific security properties that were validated by the audit team.

4.1 Actors

The relevant actors are listed below with their respective abilities:

Flexa Collateral Manager

• owner

  • Can change ownership
  • Can set and change all other actors in the system at any time
  • Can call all functionalities that other actors can call
  • Can update the delay period (time-lock) in which fallback mechanism is activated (fallbackWithdrawalDelaySeconds)

• withdrawalPublisher

  • Can add Merkle Root for authorized token withdrawals
    • Note that the root is not verified and can be an invalid value. Also the call to add root will remove the specified previous withdrawal roots in the smart contract.
  • Can remove any of the previously added roots in the smart contract

• fallbackPublisher

  • Can set Fallback Merkle Root, which will update the fallback SetDate, MaxIncludedSupplyNonce and the root itself.
    • Note that the root is not verified and can be an invalid value.
  • Can reset fallback mechanism date, resulting in delay in fallback period without publishing new root, or to deactivate the fallback mechanism temporarily

• withdrawalLimitPublisher

  • Can modify the global withdrawal limit
    • Note: setting this limit to 0, disables all withdrawals and breaks the executions (e.g. _executeWithdrawal, _executeConsumption)
    • The value of withdrawalLimit also is decreased after every consumer execution

• consumer

  • Can execute consumption (consumption transfers)
    • Note that consumer is trusted, as in if consumer executes a transfer, he can spend up to withdrawalLimit which then all withdrawals will be impossible until withdrawalLimitPublisher modifies the withdrawalLimit to a number other than 0 to re-enable withdrawals.

• partitionManager

  • Can add & remove new partitions to the system
    • Removed partition will be disallowed from incoming transfers

All the above actors in this system are trusted in this system, meaning that they could misbehave and temporarily block other functionalities of the system, however they all can be replaced by owner as well.

Update: consumer was renamed to directTransferer to remove confusion. All associated actions were also renamed, such as consume –> directTransfer and so on.

Amp Token

• owner

  • Can set partition strategy addresses, linking PartitionStrategy contracts to specific prefixes in the system

• operator

  • Anyone can authorize an Operator for all their token balance or a specific partition.
  • Can transfer from user’s balance (or the partition the operator is authorized for)
  • Any token holder is also his own operator

4.2 Important Security Properties & Trust Model

In any system, it’s important to identify what trust is expected/required between various actors. For this audit, we established the following trust model:

• Flexa (Actors in the system) are trusted, they can misbehave and update the contract in a way that the withdrawals are blocked.
• The Merkle Tree Roots published on the smart contract can be removed/replaced by the publisher actor, making the valid withdrawals invalid. However the premise is that the publisher will act honestly and is part of the system.
• There are some concerns about external call in Amp.Swap() regarding reentrancy or other malicious token implementations, however as swapToken here is previously deployed Flexa ERC20 token, we assume the token is trusted and does not have malicious intentions.
• It should be noted that ERC777 introduces the hooks that have been used for reentrancy attack vectors in other DApps that have interacted with the ERC777 smart contract.
• Partition Strategies are set by the Amp owner and we assume they are trusted, as there are external calls to the functions defined in these contracts.

5 Issues

Each issue has an assigned severity:

• Minor issues are subjective in nature. They are typically suggestions around best practices or readability. Code maintainers should use their own judgment as to whether to address such issues.
• Medium issues are objective in nature but are not security vulnerabilities. These should be addressed unless there is a clear reason not to.
• Major issues are security vulnerabilities that may not be directly exploitable or may require certain conditions in order to be exploited. All major issues should be addressed.
• Critical issues are directly exploitable security vulnerabilities that need to be fixed.

assembly {
    flag := mload(add(_data, 32))
}
if (flag == CHANGE_PARTITION_FLAG) {
    assembly {
        toPartition := mload(add(_data, 64))

assembly {
    toPartition := mload(add(_data, 64))

for (uint256 i = 116; i <= _operatorData.length; i = i + 32) {
    bytes32 temp;
    assembly {
        temp := mload(add(_operatorData, i))
    }
    proof[index] = temp;
    index++;
}

swapToken.transferFrom(_from, swapTokenGraveyard, amount);

require(swapToken.transferFrom(_from, swapTokenGraveyard, amount));

require(
    _isOperatorForPartition(_partition, msg.sender, _from) ||
        (_value <= _allowedByPartition[_partition][_from][msg.sender]),
    EC_53_INSUFFICIENT_ALLOWANCE
);

addressToWithdrawalNonce[_partition][supplier] = withdrawalRootNonce;

addressToWithdrawalNonce[_partition][supplier] = maxWithdrawalRootNonce;

maxWithdrawalRootNonce = _nonce;

uint256 proofNb = (_operatorData.length - 84) / 32;
bytes32[] memory proof = new bytes32[](proofNb);
uint256 index = 0;
for (uint256 i = 116; i <= _operatorData.length; i = i + 32) {
    bytes32 temp;
    assembly {
        temp := mload(add(_operatorData, i))
    }
    proof[index] = temp;
    index++;
}

require(
    _balanceOfByPartition[_from][_fromPartition] >= _value,
    EC_52_INSUFFICIENT_BALANCE
);

bytes32 toPartition = _fromPartition;
if (_data.length >= 64) {
    toPartition = _getDestinationPartition(_fromPartition, _data);
}

_callPreTransferHooks(
    _fromPartition,
    _operator,
    _from,
    _to,
    _value,
    _data,
    _operatorData
);

_removeTokenFromPartition(_from, _fromPartition, _value);
_transfer(_from, _to, _value);
_addTokenToPartition(_to, toPartition, _value);

_callPostTransferHooks(
    toPartition,

require(_isOperator(msg.sender, _from), EC_58_INVALID_OPERATOR);

require(_operator != msg.sender);

require(_operator != msg.sender);

emit ApprovalByPartition(_partition, _tokenHolder, _spender, _amount);

if (_data.length >= 64) {
    toPartition = _getDestinationPartition(_fromPartition, _data);
}

toPartition = _fromPartition;
if (_data.length < 64) {
    return toPartition;
}

require(msg.sender == amp, "Invalid sender");

function _canReceive(address _to, bytes32 _destinationPartition) internal view returns (bool) {
    return _to == address(this) && partitions[_destinationPartition];
}

// Indicate token verifies Amp, ERC777 and ERC20 interfaces
ERC1820Implementer._setInterface(AMP_INTERFACE_NAME);
ERC1820Implementer._setInterface(ERC20_INTERFACE_NAME);
// ERC1820Implementer._setInterface(ERC777_INTERFACE_NAME);

/**
 * @notice Indicates a supply refund was executed
 * @param supplier Address whose refund authorization was executed
 * @param partition Partition from which the tokens were transferred
 * @param amount Amount of tokens transferred
 */
event SupplyRefund(
    address indexed supplier,
    bytes32 indexed partition,
    uint256 amount,
    uint256 indexed nonce
);

ISwapToken public swapToken;

address public constant swapTokenGraveyard = 0x000000000000000000000000000000000000dEaD;

address[] public collateralManagers;

bytes4[] public partitionStrategies;

mapping(bytes32 => bool) public partitions;

mapping(uint256 => Supply) public nonceToSupply;

mapping(bytes32 => uint256) public withdrawalRootToNonce;

string internal _name;

string internal _symbol;

ISwapToken public swapToken;

address public amp;

Appendix 1 - Artifacts

This section contains some of the artifacts generated during our review by automated tools, the test suite, etc. If any issues or recommendations were identified by the output presented here, they have been addressed in the appropriate section above.

A.1.1 Harvey

As part of the audit, we performed several fuzzing campaigns using Harvey, our in-house greybox fuzzer for smart contracts, to check 8 custom properties. In order to fuzz the entire contract system, we used Flexa’s existing deployment scripts to set up an initial state for the fuzzer containing the following contracts:

• Amp
• FlexaCollateralManager
• ERC1820Registry
• MockFXC
• HolderCollateralPartitionValidator
• CollateralPoolPartitionValidator

We extended the deployment scripts to distribute MockFXC tokens to several known users such that they could interact with the system after approving the Amp contract. We also made a small number of changes to the code to improve the effectiveness of the fuzzer. Our final 24-hour fuzzing campaign was able to detect 3 property violations that were reviewed as part of the audit.

Note that—to support the auditor—several properties check if certain (not necessarily bad/dangerous) states are feasible and violations do not necessarily indicate issues with the code.

The graphs below provide an indication of the instruction and basic block transition coverage achieved by Harvey over time. After 24 hours, Harvey achieved the following coverage:

• EVM instruction coverage: 28090
• Path coverage: 7747
• EVM basic block transition coverage: 1904

A.1.2 Tests Coverage

Below is the coverage output generated by running the test suite:

It’s important to note that “100% test coverage” is not a silver bullet. Our review also included a inspection of the test suite to ensure that testing included important edge cases.

Appendix 2 - Files in Scope

This audit covered the following files:

Appendix 3 - Disclosure

ConsenSys Diligence (“CD”) typically receives compensation from one or more clients (the “Clients”) for performing the analysis contained in these reports (the “Reports”). The Reports may be distributed through other means, including via ConsenSys publications and other distributions.

The Reports are not an endorsement or indictment of any particular project or team, and the Reports do not guarantee the security of any particular project. This Report does not consider, and should not be interpreted as considering or having any bearing on, the potential economics of a token, token sale or any other product, service or other asset. Cryptographic tokens are emergent technologies and carry with them high levels of technical risk and uncertainty. No Report provides any warranty or representation to any Third-Party in any respect, including regarding the bugfree nature of code, the business model or proprietors of any such business model, and the legal compliance of any such business. No third party should rely on the Reports in any way, including for the purpose of making any decisions to buy or sell any token, product, service or other asset. Specifically, for the avoidance of doubt, this Report does not constitute investment advice, is not intended to be relied upon as investment advice, is not an endorsement of this project or team, and it is not a guarantee as to the absolute security of the project. CD owes no duty to any Third-Party by virtue of publishing these Reports.

PURPOSE OF REPORTS The Reports and the analysis described therein are created solely for Clients and published with their consent. The scope of our review is limited to a review of Solidity code and only the Solidity code we note as being within the scope of our review within this report. The Solidity language itself remains under development and is subject to unknown risks and flaws. The review does not extend to the compiler layer, or any other areas beyond Solidity that could present security risks. Cryptographic tokens are emergent technologies and carry with them high levels of technical risk and uncertainty.

CD makes the Reports available to parties other than the Clients (i.e., “third parties”) – on its website. CD hopes that by making these analyses publicly available, it can help the blockchain ecosystem develop technical best practices in this rapidly evolving area of innovation.

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