Aave Token

Date	July 2020
Lead Auditor	Daniel Luca
Co-auditors	John Mardlin

1 Executive Summary

This report presents the results of our engagement with Aave to review Aave Token.

The review was conducted over 3 days, from July 6 to July 8 2020, by Daniel Luca and John Mardlin as part of an ongoing engagement between Aave and ConsenSys Diligence. A total of 4 person-days were spent.

During the first day, we became familiar with the source code, as well as ran tests and coverage without issues. We also reviewed EIP-2612 and EIP-1967, which describe a significant part of the token’s functionality.

During the second day, we continued to manually review the code and tried to find inconsistencies between the EIP-2612 standard and the implementation. We found a discrepancy in implementation of EIP-2612, and checked with the EIP-2612 creator to ensure the specs are correct.

During the third day, we finalized the manual review, scanned the contracts with our common tools suite, and created a few constraints that were validated with the Mythx platform and we then put the report together.

On July 22nd we reviewed changes made to the system and updated this report accordingly.

2 Scope

Our review focused on the commit hash 86d4ef225a8e702b5ec8315eda3add186ff31f33. The list of files in scope can be found in the Appendix.

Following our initial review, the system was modified and reviewed again at commit hash b5d7e540d0ce16c7f8ec6e7d0d59f09d5f32f056.

2.1 Objectives

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

Ensure that the system is implemented consistently with the intended functionality, and without unintended edge cases.
Identify known vulnerabilities particular to smart contract systems, as outlined in our Smart Contract Best Practices, and the Smart Contract Weakness Classification Registry.
Identify any replay attacks or inconsistencies in the EIP-2612 implementation.
Check the upgradeability pattern.

3 Document Change Log

Version	Date	Description
1.0	2020-07-08	Initial report
1.1	2020-07-23	Updated report with changes to code

4 Recommendations

The issues are presented in approximate order of priority from highest to lowest.

4.1 Pin the Solidity version to the latest stable 0.6.x Closed

Resolution

This has been addressed in the latest reviewed version of the code.

Description

Some of the contract files are not very specific about the Solidity version, which can cause a bit of a problem in the compilation step for some tools.

VersionedInitializable is only compilable with Solidity 0.6.x versions.

code/contracts/utils/VersionedInitializable.sol:L1

pragma solidity >=0.4.24 <0.7.0;

This is because of the abstract keyword which is not compatible with lower versions of Solidity.

The new keyword abstract can be used to mark contracts as abstract. It has to be used if a contract does not implement all its functions. Abstract contracts cannot be created using the new operator, and it is not possible to generate bytecode for them during compilation.

Recommendation

Specify a fixed Solidity version for at least this contract.

4.2 Permit expiration can be set indefinite by using MAX_UINT Closed

Resolution

Addressed per the recommendation.

Description

In the permit() function, a deadline of 0 is treated as non-expiring.

code/contracts/token/AaveToken.sol:L114

require(expiration == 0 || block.timestamp <= expiration, "INVALID_EXPIRATION");

Recommendation

This extra check is unnecessary, the same can be achieved by setting the deadline to MAX_UINT. This would also be more consistent with the Uniswap-V2 implementation referenced in EIP-2612.

5 Issues

The issues are presented in approximate order of priority from highest to lowest.

5.1 Remove `nonce` argument from `permit` functions Closed

Resolution

This has been addressed in latest reviewed version of the code.

Description

The EIP-2612 specifies a way for a token owner to approve tokens for a spender without any gas costs for themselves. This is also a good way to allow a 3rd party to enable approve before a transferFrom, in the same transaction.

The standard specifies a new permit function that looks like this:

function permit(
    address owner,
    address spender, 
    uint256 value,
    uint256 deadline, 
    uint8 v,
    bytes32 r, 
    bytes32 s
)

The function in the standard does not have a nonce argument and as clarified by the standard creator, the nonce does not need to be specified, as it can be used from the contract storage.

However, the current permit implementation does contain that nonce

code/contracts/token/AaveToken.sol:L92-L101

function permit(
    address owner,
    address spender,
    uint256 nonce,
    uint256 expiration,
    uint256 amount,
    uint8 v,
    bytes32 r,
    bytes32 s
) external {

In order to match the EIP-2612 standard, the permit function needs to be changed in the following manner:

remove the nonce argument in the function definition
remove the require which checks if the provided nonce matches the nonce in the contract storage
to generate the digest, use the nonce currently available in the contract storage
if the signature is valid, increment the nonce in the contract storage.

Recommendation

Remove the nonce argument and make the necessary changes in the code and the matching tests to match the EIP-2612 spec.

Appendix 1 - Files in Scope

This audit covered the following files )

File	`git hash-object`
contracts/token/AaveToken.sol	4c5dc5478a50da52d5b530f8876368560ba8511c
contracts/token/LendToAaveMigrator.sol	e316261f318659c6af36bed651ae52bb026f0c49
contracts/utils/VersionedInitializable.sol	e5a8b87b8f89b6c5f28b25be9f7499d14b5b6ff3

Appendix 2 - 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.2.1 MythX

MythX is a security analysis API for Ethereum smart contracts. It performs multiple types of analysis, including fuzzing and symbolic execution, to detect many common vulnerability types. The tool was used for automated vulnerability discovery for all audited contracts and libraries. More details on MythX can be found at mythx.io.

Below is the raw output of the MythX vulnerability scan for each contract:

AaveToken

Click to expand Mythx AaveToken output

Report for token/AaveToken.sol ╒════════╤══════════════════════════════════════════════════╤════════════╤════════════════════════════════════════════════════════════════════════════════════╕ │ Line │ SWC Title │ Severity │ Short Description │ ╞════════╪══════════════════════════════════════════════════╪════════════╪════════════════════════════════════════════════════════════════════════════════════╡ │ 110 │ Timestamp Dependence │ Low │ A control flow decision is made based on The block.timestamp environment variable. │ ├────────┼──────────────────────────────────────────────────┼────────────┼────────────────────────────────────────────────────────────────────────────────────┤ │ 140 │ Weak Sources of Randomness from Chain Attributes │ Low │ Potential use of “block.number” as source of randonmness. │ ├────────┼──────────────────────────────────────────────────┼────────────┼────────────────────────────────────────────────────────────────────────────────────┤ │ 47 │ DoS With Block Gas Limit │ Low │ Implicit loop over unbounded data structure. │ ╘════════╧══════════════════════════════════════════════════╧════════════╧════════════════════════════════════════════════════════════════════════════════════╛

Report for open-zeppelin/ERC20.sol ╒════════╤══════════════════════════════╤════════════╤═════════════════════════════════════╕ │ Line │ SWC Title │ Severity │ Short Description │ ╞════════╪══════════════════════════════╪════════════╪═════════════════════════════════════╡ │ 306 │ Presence of unused variables │ Low │ Unused function parameter “from”. │ ├────────┼──────────────────────────────┼────────────┼─────────────────────────────────────┤ │ 306 │ Presence of unused variables │ Low │ Unused function parameter “to”. │ ├────────┼──────────────────────────────┼────────────┼─────────────────────────────────────┤ │ 306 │ Presence of unused variables │ Low │ Unused function parameter “amount”. │ ╘════════╧══════════════════════════════╧════════════╧═════════════════════════════════════╛

Report for utils/VersionedInitializable.sol ╒════════╤══════════════════════════════╤════════════╤════════════════════════════════════╕ │ Line │ SWC Title │ Severity │ Short Description │ ╞════════╪══════════════════════════════╪════════════╪════════════════════════════════════╡ │ 43 │ Presence of unused variables │ Low │ Unused state variable “______gap”. │ ╘════════╧══════════════════════════════╧════════════╧════════════════════════════════════╛

VersionedInitializable

It is an abstract contract; the implementation is used by AaveToken.

A.2.2 Surya

Surya is a utility tool for smart contract systems. It provides a number of visual outputs and information about the structure of smart contracts. It also supports querying the function call graph in multiple ways to aid in the manual inspection and control flow analysis of contracts.

Below is a complete list of functions with their visibility and modifiers:

AaveToken

AaveToken Inheritance Graph

Click to expand Contracts & File Description Table

Contracts Description Table

Contract	Type	Bases
└	Function Name	Visibility	Mutability	Modifiers

AaveToken	Implementation	ERC20, VersionedInitializable
└	<Constructor>	Public ❗️	🛑	ERC20
└	initialize	External ❗️	🛑	initializer
└	permit	External ❗️	🛑	NO❗️
└	getRevision	Internal 🔒		override
└	_writeSnapshot	Internal 🔒	🛑
└	_beforeTokenTransfer	Internal 🔒	🛑	override

Legend

Symbol	Meaning
🛑	Function can modify state
💵	Function is payable

A.2.3 Tests Suite

The tests are comprehensive and cover all of the execution branches.

Below is the output generated by running the test suite:

Click to expand Test Suite Output

$ npm test

> [email protected] test /home/daniel/Development/github.com/ConsenSys/aave-token-audit-2020-07/code
> buidler test

Compiling...


contracts/interfaces/IERC20.sol: Warning: SPDX license identifier not provided in source file. Before publishing, consider adding a comment containing "SPDX-License-Identifier: <SPDX-License>" to each source file. Use "SPDX-License-Identifier: UNLICENSED" for non-open-source code. Please see https://spdx.org for more information.



contracts/interfaces/ITransferHook.sol: Warning: SPDX license identifier not provided in source file. Before publishing, consider adding a comment containing "SPDX-License-Identifier: <SPDX-License>" to each source file. Use "SPDX-License-Identifier: UNLICENSED" for non-open-source code. Please see https://spdx.org for more information.



contracts/open-zeppelin/Address.sol: Warning: SPDX license identifier not provided in source file. Before publishing, consider adding a comment containing "SPDX-License-Identifier: <SPDX-License>" to each source file. Use "SPDX-License-Identifier: UNLICENSED" for non-open-source code. Please see https://spdx.org for more information.



contracts/open-zeppelin/BaseAdminUpgradeabilityProxy.sol: Warning: SPDX license identifier not provided in source file. Before publishing, consider adding a comment containing "SPDX-License-Identifier: <SPDX-License>" to each source file. Use "SPDX-License-Identifier: UNLICENSED" for non-open-source code. Please see https://spdx.org for more information.



contracts/open-zeppelin/BaseUpgradeabilityProxy.sol: Warning: SPDX license identifier not provided in source file. Before publishing, consider adding a comment containing "SPDX-License-Identifier: <SPDX-License>" to each source file. Use "SPDX-License-Identifier: UNLICENSED" for non-open-source code. Please see https://spdx.org for more information.



contracts/open-zeppelin/Proxy.sol: Warning: SPDX license identifier not provided in source file. Before publishing, consider adding a comment containing "SPDX-License-Identifier: <SPDX-License>" to each source file. Use "SPDX-License-Identifier: UNLICENSED" for non-open-source code. Please see https://spdx.org for more information.



contracts/open-zeppelin/SafeMath.sol: Warning: SPDX license identifier not provided in source file. Before publishing, consider adding a comment containing "SPDX-License-Identifier: <SPDX-License>" to each source file. Use "SPDX-License-Identifier: UNLICENSED" for non-open-source code. Please see https://spdx.org for more information.



contracts/open-zeppelin/UpgradeabilityProxy.sol: Warning: SPDX license identifier not provided in source file. Before publishing, consider adding a comment containing "SPDX-License-Identifier: <SPDX-License>" to each source file. Use "SPDX-License-Identifier: UNLICENSED" for non-open-source code. Please see https://spdx.org for more information.



contracts/utils/DoubleTransferHelper.sol: Warning: SPDX license identifier not provided in source file. Before publishing, consider adding a comment containing "SPDX-License-Identifier: <SPDX-License>" to each source file. Use "SPDX-License-Identifier: UNLICENSED" for non-open-source code. Please see https://spdx.org for more information.



contracts/utils/MockTransferHook.sol: Warning: SPDX license identifier not provided in source file. Before publishing, consider adding a comment containing "SPDX-License-Identifier: <SPDX-License>" to each source file. Use "SPDX-License-Identifier: UNLICENSED" for non-open-source code. Please see https://spdx.org for more information.



contracts/utils/VersionedInitializable.sol: Warning: SPDX license identifier not provided in source file. Before publishing, consider adding a comment containing "SPDX-License-Identifier: <SPDX-License>" to each source file. Use "SPDX-License-Identifier: UNLICENSED" for non-open-source code. Please see https://spdx.org for more information.



contracts/open-zeppelin/BaseAdminUpgradeabilityProxy.sol:13:1: Warning: This contract has a payable fallback function, but no receive ether function. Consider adding a receive ether function.
contract BaseAdminUpgradeabilityProxy is BaseUpgradeabilityProxy {
^ (Relevant source part starts here and spans across multiple lines).
contracts/open-zeppelin/Proxy.sol:15:3: The payable fallback function is defined here.
  fallback () payable external {
  ^ (Relevant source part starts here and spans across multiple lines).



contracts/open-zeppelin/InitializableUpgradeabilityProxy.sol:11:1: Warning: This contract has a payable fallback function, but no receive ether function. Consider adding a receive ether function.
contract InitializableUpgradeabilityProxy is BaseUpgradeabilityProxy {
^ (Relevant source part starts here and spans across multiple lines).
contracts/open-zeppelin/Proxy.sol:15:3: The payable fallback function is defined here.
  fallback () payable external {
  ^ (Relevant source part starts here and spans across multiple lines).



contracts/open-zeppelin/InitializableAdminUpgradeabilityProxy.sol:12:1: Warning: This contract has a payable fallback function, but no receive ether function. Consider adding a receive ether function.
contract InitializableAdminUpgradeabilityProxy is BaseAdminUpgradeabilityProxy, InitializableUpgradeabilityProxy {
^ (Relevant source part starts here and spans across multiple lines).
contracts/open-zeppelin/Proxy.sol:15:3: The payable fallback function is defined here.
  fallback () payable external {
  ^ (Relevant source part starts here and spans across multiple lines).



contracts/utils/MockTransferHook.sol:8:25: Warning: Unused function parameter. Remove or comment out the variable name to silence this warning.
    function onTransfer(address from, address to, uint256 amount) external override {
                        ^----------^



contracts/utils/MockTransferHook.sol:8:39: Warning: Unused function parameter. Remove or comment out the variable name to silence this warning.
    function onTransfer(address from, address to, uint256 amount) external override {
                                      ^--------^



contracts/utils/MockTransferHook.sol:8:51: Warning: Unused function parameter. Remove or comment out the variable name to silence this warning.
    function onTransfer(address from, address to, uint256 amount) external override {
                                                  ^------------^

Compiled 19 contracts successfully


-> Deploying test environment...
WARNING: Multiple definitions for initialize
WARNING: Multiple definitions for initialize
setup: 359.179ms

***************
Setup and snapshot finished
***************

  AAVE token
    ✓ Checks initial configuration
    ✓ Checks the domain separator
    ✓ Checks the revision
    ✓ Checks the allocation of the initial AAVE supply
WARNING: Multiple definitions for initialize
    ✓ Starts the migration
    ✓ Checks the snapshots emitted after the initial allocation
    ✓ Record correctly snapshot on migration (66ms)
    ✓ Record correctly snapshot on transfer (48ms)
    ✓ Submits a permit with 0 expiration (38ms)
    ✓ Cancels the previous permit
    ✓ Tries to submit a permit with invalid nonce
    ✓ Tries to submit a permit with invalid expiration (previous to the current block)
    ✓ Tries to submit a permit with invalid signature
    ✓ Tries to submit a permit with invalid owner
    ✓ Correct snapshotting on double action in the same block (100ms)
    ✓ Emits correctly mock event of the _beforeTokenTransfer hook

  LEND migrator
    ✓ Check the constructor is executed properly
    ✓ Check migration isn't started
WARNING: Multiple definitions for initialize
    ✓ Starts the migration
    ✓ Migrates 1000 LEND (70ms)


  20 passing (1s)

Even though it seems like there isn’t 100% coverage, the unexplored branch in the tests is actually not reachable in that specific case.

Click to expand Test coverage

-----------------------------|----------|----------|----------|----------|----------------|
File                         |  % Stmts | % Branch |  % Funcs |  % Lines |Uncovered Lines |
-----------------------------|----------|----------|----------|----------|----------------|
 interfaces/                 |      100 |      100 |      100 |      100 |                |
  IERC20.sol                 |      100 |      100 |      100 |      100 |                |
  IERC20Detailed.sol         |      100 |      100 |      100 |      100 |                |
  ITransferHook.sol          |      100 |      100 |      100 |      100 |                |
 token/                      |      100 |    88.89 |      100 |      100 |                |
  AaveToken.sol              |      100 |     87.5 |      100 |      100 |                |
  LendToAaveMigrator.sol     |      100 |      100 |      100 |      100 |                |
 utils/                      |      100 |       50 |      100 |      100 |                |
  DoubleTransferHelper.sol   |      100 |      100 |      100 |      100 |                |
  MintableErc20.sol          |      100 |      100 |      100 |      100 |                |
  MockTransferHook.sol       |      100 |      100 |      100 |      100 |                |
  VersionedInitializable.sol |      100 |       50 |      100 |      100 |                |
-----------------------------|----------|----------|----------|----------|----------------|
All files                    |      100 |       85 |      100 |      100 |                |
-----------------------------|----------|----------|----------|----------|----------------|

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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TIMELINESS OF CONTENT The content contained in the Reports is current as of the date appearing on the Report and is subject to change without notice. Unless indicated otherwise, by ConsenSys and CD.

1 Executive Summary

2 Scope

2.1 Objectives

3 Document Change Log

4 Recommendations

4.1 Pin the Solidity version to the latest stable 0.6.x Closed

Resolution

Description

Recommendation

4.2 Permit expiration can be set indefinite by using MAX_UINT Closed

Resolution

Description

Recommendation

5 Issues

5.1 Remove nonce argument from permit functions Closed

Resolution

Description

Recommendation

Appendix 1 - Files in Scope

Appendix 2 - Artifacts

A.2.1 MythX

AaveToken

VersionedInitializable

A.2.2 Surya

AaveToken

Contracts Description Table

Legend

A.2.3 Tests Suite

Appendix 3 - Disclosure

5.1 Remove `nonce` argument from `permit` functions Closed