Nuts Finance BTCPlus

1 Executive Summary

This report presents the results of our engagement with NUTS Finance to review BTCPlus and Plus assets framework.

The review was conducted over one week, from May 17, 2021 to May 21, 2021 by Shayan Eskandari and Daniel Luca. A total of 10 person-days were spent.

Update Aug 2021: The report was updated with the comments from the developer team. Note that the code changes were not reviewed as part of this audit report.

2 Scope

Our review focused on the commit hash 6b405dd01507e7c6c6b4a106b7a308591eec2f01. Due to the time constraints and the short engagement, the codebase was prioritized as following:

1. Main Files (Plus.sol, SinglePlus.sol, and CompositePlus.sol)
2. Governance /governance
3. DeFi Integrations /single
4. Helper Contracts and Miscellaneous /misc

This is a best effort review in the time frame of the engagement. Because of the short amount of time and great number of code that was added to the scope of the review, we recommend a new review to be done to the code, but only after a code freeze and new scoping.

3 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.

We identified a significant amount of risk because of the great number of tokens (other systems with their own complexity) and DeFi protocols that are integrated in the system. This isn’t only limited to tokens on the Ethereum network, but also on the Binance Smart Chain, which recently started to have similar kind of attack pattern that swept Ethereum recently. Integrating those tokens (along with the tokens on the Ethereum network) adds significant risk if done all at once.

Also, the impressive amount of code added to the project since the last code reviews, mostly to integrate other tokens and DeFi protocols, adds risk at a staggering pace. As mentioned in the Findings section, complete test coverage for these integrations is crucial to the security of the system.

A careful process that selects tokens to be added to the system, reviews their capabilities and their risks and finds ways to include them as “plus” tokens is recommended. At the moment there is a lot of code that tries to include the tokens in the system but a clear process is not described. Each token comes with its own capabilities and features that might affect the system in surprising ways.

3.1 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:

• Given that the plus assets (and specially the composite assets) are pegged with different DeFi assets (e.g. interest-bearing staked tokens), they are exposed to the risks of the underlying DeFi protocol. As an example, a composite token is a basket of other composite tokens and plus assets. If the project regarding one of the assets in this basket gets hacked, the token owner has to manually separate the hacked token from the rest of the basket. This requires deep knowledge of the plus asset system to ensure no further losses happen due to human error.

• In addition to the above risk, there is an inherent risk in integration the DeFi protocols which have mintable tokens. Due to the way NUTS finance calculates rewards that is based on the totalSupply of the underlying tokens, this can be leveraged into getting more rewards from the system than intended. We were not able to compile an exploitable path for this issue in the time frame of the audit, however it’s an issue that should be verified by the developer team.

• Actors in the system, such as the governance and strategists are trusted and they can halt the system by setting up the variables in a way that normal functionalities fail to execute (e.g. rebase() which is called in most actions).

4 Findings

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.

/**
 * @dev Harvest additional yield from the investment.
 * Only governance or strategist can call this function.
 */
function harvest(address[] calldata _tokens, uint256[] calldata _cumulativeAmounts, uint256 _index, uint256 _cycle,

// 1. Harvest from Badger Tree
IBadgerTree(BADGER_TREE).claim(_tokens, _cumulativeAmounts, _index, _cycle, _merkleProof, _amountsToClaim);

// 2. Sushi: Badger --> WBTC
uint256 _badger = IERC20Upgradeable(BADGER).balanceOf(address(this));
if (_badger > 0) {
    IERC20Upgradeable(BADGER).safeApprove(SUSHISWAP, 0);
    IERC20Upgradeable(BADGER).safeApprove(SUSHISWAP, _badger);

    address[] memory _path = new address[](2);
    _path[0] = BADGER;
    _path[1] = WBTC;

    IUniswapRouter(SUSHISWAP).swapExactTokensForTokens(_badger, uint256(0), _path, address(this), block.timestamp.add(1800));
}

* @dev Deprecated. This function has issues similar to the ones found in
* {IERC20-approve}, and its usage is discouraged.

     * @dev Deprecated. This function has issues similar to the ones found in
     * {IERC20-approve}, and its usage is discouraged.

IUniswapRouter(SUSHISWAP).swapExactTokensForTokens(_badger, uint256(0), _path, address(this), block.timestamp.add(1800));

modifier onlyGovernance() {
    _checkGovernance();
    _;
}

function _checkGovernance() internal view {
    require(msg.sender == governance, "not governance");
}

function _checkStrategist() internal view {
    require(msg.sender == governance || strategists[msg.sender], "not strategist");
}

modifier onlyStrategist {
    _checkStrategist();
    _;
}

function _checkGovernance() internal view {
    require(msg.sender == governance, "not governance");
}

modifier onlyGovernance() {
    _checkGovernance();
    _;
}

function _checkGovernance() internal view {
    require(msg.sender == IGaugeController(controller).governance(), "not governance");
}

modifier onlyGovernance() {
    _checkGovernance();
    _;
}

        uint256 _balance = balanceOf(_account);
        uint256 _supply = totalSupply();
        uint256 _limit = _balance.mul(TOKENLESS_PRODUCTION).div(100);
        if (_votingTotal > 0) {
            uint256 _boosting = _supply.mul(_votingBalance).mul(100 - TOKENLESS_PRODUCTION).div(_votingTotal).div(100);
            _limit = _limit.add(_boosting);
        }

Appendix 1 - Files in Scope

This audit covered the following files:

Due to time constraints, the codebase was prioritized and the following files were not reviewed properly:

Appendix 2 - 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.

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