Tokenize It

1 Executive Summary

This report presents the results of our engagement with Tokenize It to review the Tokenize It smart contracts.

The review was conducted over three weeks, from November 20th, 2023 to December 8th, 2023, by Sergii Kravchenko and François Legué. A total of 5 person-weeks were spent on this audit.

The Tokenize It platform helps companies create and issue or sell tokens that grant economic rights to the token holder. This platform can be used to:

• create an ERC20 token that grants participation rights in the company to the token holders;
• raise funds through public or private offers;
• give employees participation (directly or through a vesting plan).

The platform serves as an intermediate and facilitates the deployment of contracts and the verification of the requirements for the token sender and the token receiver.

2 Scope

Our review focused on the commit hash 9973fc31043e8500bc187d852fc50494f1007f96. The list of files in scope can be found in the Appendix.

During the audit, some changes and fixes were made, and the final codebase has the following commit hash: 19bd32b835ff24ff2c7decf70adbd8ac5968a931.

2.1 Objectives

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

1. Correctness of the implementation, consistent 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. Cloning and initialization functionality works as expected.
4. Permission checks while transferring tokens work as intended.
5. Vesting commitments work as expected.

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.

3.1 Actors

The relevant actors are listed below with their respective abilities:

• Tokenize It team. Manages the infrastructure required to run correctly, including the frontend enabling users to deploy contracts. The team manages the AllowList contracts that help attest address attributes (KYCed, nationality, age, etc.). Tokenize It team controls the FeeSettings contract which manages the fees paid to the Tokenize It platform.
• Company or founder. Creates a token that represents participation rights in the company. Determines how the tokens can be emitted (through public fundraising, private investing or giving tokens to employees)
• Investor. Buys tokens of a company through a public or private fundraising / offer.
• Employee. Works for a company and receives tokens as part of their compensation.

3.2 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:

• Tokenize It team. The team is trusted in attesting and inserting attributes associated with addresses in the AllowList contract. The team is also in charge of legally validating the companies and founders that want to create a token.
• Company or founder. The company owner or founder who wants to emit tokens is trusted to operate correctly. The central component of the Tokenize It project is the Token contract. It is owned by the company owner or founder. It is worth noting that this contract can be upgraded and its logic modified.

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.

function buy(uint256 _amount, address _tokenReceiver) public whenNotPaused nonReentrant {
    // rounding up to the next whole number. Investor is charged up to one currency bit more in case of a fractional currency bit.
    uint256 currencyAmount = Math.ceilDiv(_amount * getPrice(), 10 ** token.decimals());

function buy(uint256 _amount, address _tokenReceiver) public whenNotPaused nonReentrant {
    // rounding up to the next whole number. Investor is charged up to one currency bit more in case of a fractional currency bit.
    uint256 currencyAmount = Math.ceilDiv(_amount * getPrice(), 10 ** token.decimals());

    (uint256 fee, address feeCollector) = _getFeeAndFeeReceiver(currencyAmount);
    if (fee != 0) {
        currency.safeTransferFrom(_msgSender(), feeCollector, fee);
    }

    currency.safeTransferFrom(_msgSender(), currencyReceiver, currencyAmount - fee);
    _checkAndDeliver(_amount, _tokenReceiver);

    emit TokensBought(_msgSender(), _amount, currencyAmount);
}

uint256 currencyAmount = Math.ceilDiv(
    _arguments.tokenAmount * _arguments.tokenPrice,
    10 ** _arguments.token.decimals()
);

require(_arguments.tokenPrice != 0, "_tokenPrice needs to be a non-zero amount");

require(
    _arguments.minAmountPerBuyer <= _arguments.maxAmountPerBuyer,
    "_minAmountPerBuyer needs to be smaller or equal to _maxAmountPerBuyer"
);

lastBuyDate = _arguments.lastBuyDate;

function _checkAndDeliver(uint256 _amount, address _tokenReceiver) internal {
    require(tokensSold + _amount <= maxAmountOfTokenToBeSold, "Not enough tokens to sell left");
    require(tokensBought[_tokenReceiver] + _amount >= minAmountPerBuyer, "Buyer needs to buy at least minAmount");
    require(
        tokensBought[_tokenReceiver] + _amount <= maxAmountPerBuyer,
        "Total amount of bought tokens needs to be lower than or equal to maxAmount"
    );

    if (lastBuyDate != 0 && block.timestamp > lastBuyDate) {
        revert("Last buy date has passed: not selling tokens anymore.");
    }

    tokensSold += _amount;
    tokensBought[_tokenReceiver] += _amount;

    token.mint(_tokenReceiver, _amount);
}

require(address(_arguments.currency) != address(0), "currency can not be zero address");

defaultTokenFeeNumerator = proposedDefaultFees.tokenFeeNumerator;
defaultTokenFeeDenominator = proposedDefaultFees.tokenFeeDenominator;
defaultCrowdinvestingFeeNumerator = proposedDefaultFees.crowdinvestingFeeNumerator;
defaultCrowdinvestingFeeDenominator = proposedDefaultFees.crowdinvestingFeeDenominator;
defaultPrivateOfferFeeNumerator = proposedDefaultFees.privateOfferFeeNumerator;
defaultPrivateOfferFeeDenominator = proposedDefaultFees.privateOfferFeeDenominator;

function _isFractionAGreater(
    uint32 aNumerator,
    uint32 aDenominator,
    uint32 bNumerator,
    uint32 bDenominator
) internal pure returns (bool) {
    return uint256(aNumerator) * bDenominator > uint256(bNumerator) * aDenominator;
}

    function _getSalt(
        bytes32 _rawSalt,
        address _trustedForwarder,
        CrowdinvestingInitializerArguments memory _arguments
    ) internal pure returns (bytes32) {
        return keccak256(abi.encode(_rawSalt, _trustedForwarder, _arguments));
    }
}

function _generateSalt(
    bytes32 _rawSalt,
    address _trustedForwarder,
    address _owner,
    uint64 _slopeEnumerator,
    uint64 _slopeDenominator,
    uint64 _startTimeOrBlockNumber,
    uint32 _stepDuration,
    bool _isBlockBased,
    bool _isRising
) internal pure returns (bytes32) {
    return
        keccak256(
            abi.encodePacked(
                _rawSalt,
                _trustedForwarder,
                _owner,
                _slopeEnumerator,
                _slopeDenominator,
                _startTimeOrBlockNumber,
                _stepDuration,
                _isBlockBased,
                _isRising
            )
        );
}

function _getSalt(
    bytes32 _rawSalt,
    PrivateOfferArguments calldata _arguments,
    uint64 _vestingStart,
    uint64 _vestingCliff,
    uint64 _vestingDuration,
    address _vestingContractOwner
) private pure returns (bytes32) {
    return
        keccak256(
            abi.encode(_rawSalt, _arguments, _vestingStart, _vestingCliff, _vestingDuration, _vestingContractOwner)
        );
}

function _getSalt(
    bytes32 _rawSalt,
    address _trustedForwarder,
    IFeeSettingsV2 _feeSettings,
    address _admin,
    AllowList _allowList,
    uint256 _requirements,
    string memory _name,
    string memory _symbol
) private pure returns (bytes32) {
    return
        keccak256(
            abi.encodePacked(
                _rawSalt,
                _trustedForwarder,
                _feeSettings,
                _admin,
                _allowList,
                _requirements,
                _name,
                _symbol
            )
        );
}

bytes32 salt = keccak256(abi.encodePacked(_rawSalt, _trustedForwarder, _owner, _token));

import "@openzeppelin/contracts/token/ERC20/extensions/IERC20Metadata.sol";

import "@openzeppelin/contracts-upgradeable/security/ReentrancyGuardUpgradeable.sol";

import "@openzeppelin/contracts/proxy/Clones.sol";

import "@openzeppelin/contracts/token/ERC20/extensions/IERC20Metadata.sol";
import "@openzeppelin/contracts/utils/math/SafeCast.sol";

import "@openzeppelin/contracts/proxy/Clones.sol";

import "@openzeppelin/contracts/proxy/Clones.sol";

function setLastBuyDate(uint256 _lastBuyDate) external onlyOwner whenPaused {
    lastBuyDate = _lastBuyDate;
    coolDownStart = block.timestamp;
}

function activateDynamicPricing(
    IPriceDynamic _priceOracle,
    uint256 _priceMin,
    uint256 _priceMax
) external onlyOwner whenPaused {
    _activateDynamicPricing(_priceOracle, _priceMin, _priceMax);
    coolDownStart = block.timestamp;
    emit DynamicPricingActivated(address(_priceOracle), _priceMin, _priceMax);
}

/**
 * Activates dynamic pricing and sets the price oracle, as well as the minimum and maximum price.
 * @param _priceOracle this address is queried for the current price of a token
 * @param _priceMin price will never be less that this
 * @param _priceMax price will never be more than this
 */
function _activateDynamicPricing(IPriceDynamic _priceOracle, uint256 _priceMin, uint256 _priceMax) internal {
    require(address(_priceOracle) != address(0), "_priceOracle can not be zero address");
    priceOracle = _priceOracle;
    require(_priceMin <= priceBase, "priceMin needs to be smaller or equal to priceBase");
    priceMin = _priceMin;
    require(priceBase <= _priceMax, "priceMax needs to be larger or equal to priceBase");
    priceMax = _priceMax;
    coolDownStart = block.timestamp;

    emit DynamicPricingActivated(address(_priceOracle), _priceMin, _priceMax);
}

Appendix 1 - Files in Scope

This audit covered the following files:

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 bug-free 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.

A.2.1 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 code and only the code we note as being within the scope of our review within this report. Any Solidity code itself presents unique and unquantifiable risks as 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 specified code that could present security risks. Cryptographic tokens are emergent technologies and carry with them high levels of technical risk and uncertainty. In some instances, we may perform penetration testing or infrastructure assessments depending on the scope of the particular engagement.

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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