Dafi BSC-ETH Bridge (Final Audit)

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INTRODUCTION

Name: Dafi bridge (Final Audit)
Auditors: Moazzam Arif | Muhammad Jarir
Platform: Ethereum/Solidity
Type of review: ETH - BSC Bridge
Methods: Architecture Review, Functional Testing, Computer-Aided Verification, Manual Review
Git repository: https://github.com/DAFIProtocol/dBridge/tree/dafi-bridge-contracts
White paper/ Documentation: Dafi Bridge Flow Document (1).pdf
Document log:
Initial Audit: 30th November 2021 Final Audit: 2nd December 2021

Scope

The git-repository shared was checked for common code violations along with vulnerability-specific probing to detect major issues/vulnerabilities. Some specific checks are as follows:

Code reviewFunctional review
Reentrancy Unchecked external callBusiness Logics Review
Ownership TakeoverERC20 API violationFunctionality Checks
Timestamp DependenceUnchecked mathAccess Control & Authorization
Gas Limit and LoopsUnsafe type inferenceEscrow manipulation
DoS with (Unexpected) ThrowImplicit visibility levelToken Supply manipulation
DoS with Block Gas LimitDeployment ConsistencyAsset’s integrity
Transaction-Ordering DependenceRepository ConsistencyUser Balances manipulation
Style guide violationData ConsistencyKill-Switch Mechanism
Costly LoopOperation Trails & Event Generation

Project Overview

A detailed overview of the project can be found here:
https://blog.dafiprotocol.io/introducing-the-dbridge-testnet-c564f5b4eea2

Dafi’s “dbridge” enables users to bring their ERC-20 $DAFI tokens across from the Ethereum network to Binance Smart Chain, and vice versa, with aims of making $DAFI available on multiple high-speed and low-cost networks. As Dafi’s goal is to support every token on most chains, to launch their own dToken, it’s important that their protocol is cross-chain.

Dafi Bridge is an implementation of a generic POA Bridge. Authority is distributed among validators. Validators sign the proof-of-burn message and the user submits (to avoid gas griefing attacks) the signature on the alternate chain to claim tokens.

The codebase:

The system consists of 3 smart contracts (i.e ETH Bridge, BSC Bridge & a burnable/mintable ERC20 token representing Dafi on alternate chains)

Bridge contracts have onlyOwner modifier to set configurations (i.e adding/removing validators, minimum signers required(threshold)).

AUDIT REPORT

Executive Summary

The analysis indicates that the contracts audited are working properly.

Our team performed a technique called “Filtered Audit”, where the contract was separately audited by two individuals. After their thorough and rigorous process of manual testing, no potential flags were raised.

Our team found:

# of issues Severity of the risk
0Critical Risk issue(s)
0High Risk issue(s)
1Medium Risk issue(s)
1Low Risk issue(s)
3Informatory issue(s)

FINDINGS

Critical-risk issues

No critical-risk issues were found in the review.

High-risk issues

No high-risk issues were found in the review.

Medium-risk issues

1. If ETHToken is changed, tokens will be locked forever in the contract

File: ETHBridgeOptimized.sol

Description:

Owner(multisig) can change the underlying ETHToken address. If there are tokens locked in the smart contract and changeToken() is called, tokens will be locked forever in the contract.

Remedy:

Remove changeToken() method from the contract. If there is a need to change the token address, a new contract can be deployed.

Status: 

Fixed.

Low-risk issues

1. Unnecessary allowance check in burn/lock tokens

File: ETHBridgeOptimized.sol, BinanceBridgeOptimized.sol

Description:

 if (IERC20(BSCTOKEN).allowance(msg.sender, address(this)) < amount)
  revert AllowanceInsufficient( 
  IERC20(BSCTOKEN).allowance(msg.sender, address(this)), amount); 

When burning/locking tokens, the contract checks if the msg.sender has allowed the smart contract (address(this)) to burn/lock. This check will cost extra gas. Normally these checks are used with burnFrom. There is already check placed in the burn method of dafiToken.sol

Remedy:

Remove allowance checks

Status: 

Fixed.

Informatory issues and Optimizations

1. Misleading variable/function names

File: ETHBridgeOptimized.sol, BinanceBridgeOptimized.sol, dafiTokenBSC.sol
 function burnTokens(uint256 amount, address targetChain) external { 
 function lockTokens(uint256 amount, address targetChain) external { 
 function viewOwners(address checkAddress) external view returns (bool) //viewValidators 
 function burn(uint256 _value, address _beneficiary) external onlyBridge { // burnFrom 

Remedy:

Our suggestion is that
1. targetChain should be recipient
2. viewOwners should be ViewValidators
2. burn should be burnFrom in dafiToken

2. Gas cost optimization while incrementing nonce

File: ETHBridgeOptimized.sol, BinanceBridgeOptimized.sol

Description:

nonceIncrement() method is used to increment a state variable nonce. Calling a function instead of directly updating the state variable will save the gas cost. Calling a function introduce JUMP opcode which has a higher gas cost

Status: 

Fixed.

3. Centralization risk on minting/burning on BSC Token

Description:

onlyBridge can burn/mint tokens. Bridge address can be changed by the owner (MultiSig). There are no potential risks as long as the signers of the multisig are honest.

DISCLAIMER

The smart contracts provided by the client for audit purposes have been thoroughly analyzed in compliance with the global best practices till date w.r.t cybersecurity vulnerabilities and issues in smart contract code, the details of which are enclosed in this report. 

This report is not an endorsement or indictment of the project or team, and they do not in any way guarantee the security of the particular object in context. This report is not considered, and should not be interpreted as an influence, on the potential economics of the token, its sale or any other aspect of the project. 

Crypto assets/tokens are results of the emerging blockchain technology in the domain of decentralized finance and they 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.

Smart contracts are deployed and executed on a blockchain. The platform, its programming language, and other software related to the smart contract can have its vulnerabilities that can lead to hacks. The scope of our review is limited to a review of the 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.

This audit cannot be considered as a sufficient assessment regarding the utility and safety of the code, bug-free status or any other statements of the contract. While we have done our best in conducting the analysis and producing this report, it is important to note that you should not rely on this report only - we recommend proceeding with several independent audits and a public bug bounty program to ensure security of smart contracts.

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