eRLC iExec

1 Executive Summary

This report presents the results of our engagement with iExec to review the eRLC code base for KYC-enabled ERC-20 (ERC-677) tokens as well as the integration of these tokens with the iExec PoCo smart contracts.

The review was conducted by Shayan Eskandari and Nicholas Ward over the course of 10 person-days between January 4th and January 8th, 2021.

2 Scope

Our review focused on the commit hash b16266d4940f9cc695859a47c483485c48fbda66 for eRLC and the KYC additions to the PoCo delegate modules at commit hash 96a39c9d53668896321556d23351a4e79d4d46a8. Notably, the scope excluded the PoCo delegate mechanism itself and all other functionalities within the PoCo system. The complete list of files in scope for each repository can be found in the Appendix.

2.1 Objectives

Together with the iExec 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.
3. Assess the design and implementation of the eRLC token contract, including KYC access controls and deposit and withdrawal functionality.
4. Review the addition of KYC-aware transfer hooks and authorization checks to the PoCo system.

3 Security Specification

This section describes, from a security perspective, the expected behavior of the system under review. 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.

3.1 Actors

The relevant actors are listed below with their respective abilities:

eRLC Actors:

• Admin (DEFAULT_ADMIN_ROLE):

  • Manage KYC Admins
  • Initiate Snapshots of user balances snapshot
  • Claim any tokens sent to the eRLC contract (will be added to the admin’s balance)
  • Recover unintentional deposits of the underlying token (will be added to the admin’s balance)

• KYC Admin (KYC_ADMIN_ROLE): kyc admin, manages kyc members

  • Grant and revoke KYC role to a set of addresses grantKYC , revokeKYC

• KYC Member (KYC_MEMBER_ROLE):

  • Deposit, Withdraw, Receive, and Transfer tokens.

• Anyone else:

  • Due to the verification of KYC in the ERC-677 _beforeTokenTransfer() callback, no account without the KYC_MEMBER_ROLE can perform any actions in the contract.

While it is an explicitly desired property of the system, it is important to note the ability of the KYC Admin to revoke KYC at any time, effectively freezing the funds for a given address.

3.2 Security Properties

The following is a non-exhaustive list of security properties that were verified in this audit:

• eRLC as described in the Executive summary is mainly a KYC token, hence trusting the admins to act according to the regulations is a feature of the system. This includes but not limited to locking accounts (none-KYC members) from using the system, minting new tokens and claiming the extra tokens in the contract.
• Only the KYC Admin can grant or revoke KYC approval
• No address without the KYC_MEMBER_ROLE can deposit, transfer, or withdraw eRLC tokens
• Tokens can be minted only on deposit of an equivalent amount of the underlying asset or by the Admin when claiming the excess balance of the eRLC contract via recover()
• No amount of the underlying asset can be withdrawn from the eRLC contract without burning an equivalent amount of the eRLC token

4 Recommendations

uint8 internal constant _RESTRICTION_OK               = uint8(0);
uint8 internal constant _RESTRICTION_MISSING_KYC_FROM = uint8(0x01);
uint8 internal constant _RESTRICTION_MISSING_KYC_TO   = uint8(0x02);

uint8 restrictionCode = m_baseToken.detectTransferRestriction(from, to, amount);
if (restrictionCode != uint8(0))
{
	revert(m_baseToken.messageForTransferRestriction(restrictionCode));
}

function grantKYC(address[] calldata accounts)
external virtual override
{
    for (uint256 i = 0; i < accounts.length; ++i)
    {
        grantRole(KYC_MEMBER_ROLE, accounts[i]);
    }
}

function revokeKYC(address[] calldata accounts)
external virtual override
{
    for (uint256 i = 0; i < accounts.length; ++i)
    {
        revokeRole(KYC_MEMBER_ROLE, accounts[i]);
    }
}

Appendix 1 - Files in Scope

This review covered the following files:

eRLC Repository:

PoCo Repository:

Appendix 2 - Disclosure

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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.

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