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MakerDAO PQ Review
Score: 84%

Overview

This is a Marker DAO Process Quality Review completed on 4 May 2021. It was performed using the Process Review process (version 0.7) and is documented here. The review was performed by Rex of DeFiSafety. Check out our Telegram.
The final score of the review is 84%, a strong pass. The breakdown of the scoring is in Scoring Appendix. For our purposes, a pass is 70%.

Summary of the Process

Very simply, the review looks for the following declarations from the developer's site. With these declarations, it is reasonable to trust the smart contracts.
    Here are my smart contracts on the blockchain
    Here is the documentation that explains what my smart contracts do
    Here are the tests I ran to verify my smart contract
    Here are the audit(s) performed on my code by third party experts
    Here are the admin controls and strategies

Disclaimer

This report is for informational purposes only and does not constitute investment advice of any kind, nor does it constitute an offer to provide investment advisory or other services. Nothing in this report shall be considered a solicitation or offer to buy or sell any security, token, future, option or other financial instrument or to offer or provide any investment advice or service to any person in any jurisdiction. Nothing contained in this report constitutes investment advice or offers any opinion with respect to the suitability of any security, and the views expressed in this report should not be taken as advice to buy, sell or hold any security. The information in this report should not be relied upon for the purpose of investing. In preparing the information contained in this report, we have not taken into account the investment needs, objectives and financial circumstances of any particular investor. This information has no regard to the specific investment objectives, financial situation and particular needs of any specific recipient of this information and investments discussed may not be suitable for all investors.
Any views expressed in this report by us were prepared based upon the information available to us at the time such views were written. The views expressed within this report are limited to DeFiSafety and the author and do not reflect those of any additional or third party and are strictly based upon DeFiSafety, its authors, interpretations and evaluation of relevant data. Changed or additional information could cause such views to change. All information is subject to possible correction. Information may quickly become unreliable for various reasons, including changes in market conditions or economic circumstances.
This completed report is copyright (c) DeFiSafety 2021. Permission is given to copy in whole, retaining this copyright label.

Chain

This section indicates the blockchain used by this protocol. The chains and their multiples are explained in this document.
Chain: Ethereum

Code and Team

This section looks at the code deployed on the Mainnet that gets reviewed and its corresponding software repository. The document explaining these questions is here. This review will answer the questions;
1) Are the executing code addresses readily available? (%) 2) Is the code actively being used? (%) 3) Is there a public software repository? (Y/N) 4) Is there a development history visible? (%) 5) Is the team public (not anonymous)? (Y/N)

1) Are the executing code addresses readily available? (%)

Answer: 100%
You have to dig a bit to find the deployed contract addresses. First pick Developers from the website, then Documentation. From there when you dig to a particular module, with the detailed documentation they have the Etherscan address. A bit different, but effective. 3 clicks to an address, so 100%. See Appendix for an example,
Guidance: 100% Clearly labelled and on website, docs or repo, quick to find 70% Clearly labelled and on website, docs or repo but takes a bit of looking 40% Addresses in mainnet.json, in discord or sub graph, etc 20% Address found but labelling not clear or easy to find 0% Executing addresses could not be found
They are available at website ____ as indicated in the Appendix.

How to improve this score

Make the Ethereum addresses of the smart contract utilized by your application available on either your website or your GitHub (in the README for instance). Ensure the addresses is up to date. This is a very important question wrt to the final score.

2) Is the code actively being used? (%)

Answer: 100%
Activity is over 2,000 transactions a day, as indicated in the Appendix.

Percentage Score Guidance

100% More than 10 transactions a day 70% More than 10 transactions a week 40% More than 10 transactions a month 10% Less than 10 transactions a month 0% No activity

3) Is there a public software repository? (Y/N)

Answer: Yes
Is there a public software repository with the code at a minimum, but normally test and scripts also (Y/N). Even if the repo was created just to hold the files and has just 1 transaction, it gets a Yes. For teams with private repos, this answer is No.

4) Is there a development history visible? (%)

Answer: 100%
With 396 commits and 18 branches, this is a healthy repo
This checks if the software repository demonstrates a strong steady history. This is normally demonstrated by commits, branches and releases in a software repository. A healthy history demonstrates a history of more than a month (at a minimum).
Guidance: 100% Any one of 100+ commits, 10+branches 70% Any one of 70+ commits, 7+branches 50% Any one of 50+ commits, 5+branches 30% Any one of 30+ commits, 3+branches 0% Less than 2 branches or less than 10 commits

5) Is the team public (not anonymous)? (Y/N)

Answer: Yes
For a yes in this question the real names of some team members must be public on the website or other documentation. If the team is anonymous and then this question is a No.

Documentation

This section looks at the software documentation. The document explaining these questions is here.
Required questions are;
6) Is there a whitepaper? (Y/N) 7) Are the basic software functions documented? (Y/N) 8) Does the software function documentation fully (100%) cover the deployed contracts? (%) 9) Are there sufficiently detailed comments for all functions within the deployed contract code (%) 10) Is it possible to trace from software documentation to the implementation in code (%)

6) Is there a whitepaper? (Y/N)

Answer: Yes

7) Are the basic software functions documented? (Y/N)

Answer: Yes

8) Does the software function documentation fully (100%) cover the deployed contracts? (%)

Answer: 100%
In the Maker Docs there is excellent documentation on all contracts in the protocol.
Guidance:
100% All contracts and functions documented 80% Only the major functions documented 79-1% Estimate of the level of software documentation 0% No software documentation

How to improve this score

This score can improve by adding content to the requirements document such that it comprehensively covers the requirements. For guidance, refer to the SecurEth System Description Document . Using tools that aid traceability detection will help.

9) Are there sufficiently detailed comments for all functions within the deployed contract code (%)

Answer: 25
As per the code examples there is only minimal commenting in the actual code. Despite excellent top level documentation, there is little connection and the code alone does not explain or connect with the documentation.
Code examples are in the Appendix. As per the SLOC, there is 21% commenting to code (CtC).
The Comments to Code (CtC) ratio is the primary metric for this score.
Guidance: 100% CtC > 100 Useful comments consistently on all code 90-70% CtC > 70 Useful comment on most code 60-20% CtC > 20 Some useful commenting 0% CtC < 20 No useful commenting

How to improve this score

This score can improve by adding comments to the deployed code such that it comprehensively covers the code. For guidance, refer to the SecurEth Software Requirements.

10) Is it possible to trace from software documentation to the implementation in code (%)

Answer: 60%
The detailed docs give clear, but not explicit traceability with examples within the docs.
Guidance: 100% - Clear explicit traceability between code and documentation at a requirement level for all code 60% - Clear association between code and documents via non explicit traceability 40% - Documentation lists all the functions and describes their functions 0% - No connection between documentation and code

How to improve this score

This score can improve by adding traceability from requirements to code such that it is clear where each requirement is coded. For reference, check the SecurEth guidelines on traceability.

Testing

This section looks at the software testing available. It is explained in this document. This section answers the following questions;
11) Full test suite (Covers all the deployed code) (%) 12) Code coverage (Covers all the deployed lines of code, or explains misses) (%) 13) Scripts and instructions to run the tests (Y/N) 14) Report of the results (%) 15) Formal Verification test done (%) 16) Stress Testing environment (%)

11) Is there a Full test suite? (%)

Answer: 100%
There is a separate test file for almost each solidity file. The test files stay with each branch of the source files. There is a 171% of tests to code as per the SLOC data
This score is guided by the Test to Code ratio (TtC). Generally a good test to code ratio is over 100%. However the reviewers best judgement is the final deciding factor.
Guidance: 100% TtC > 120% Both unit and system test visible 80% TtC > 80% Both unit and system test visible 40% TtC < 80% Some tests visible 0% No tests obvious

12) Code coverage (Covers all the deployed lines of code, or explains misses) (%)

Answer: 70%
There is no evidence of organized collection of code coverage. The CodeCov in the GitHub is enabled, but empty. However with the comprehensive set of tests, some coverage would be found. 50% as per guidance below.
However on page 44 of the ToBits audit is the code coverage. There is no summary but the main files have high coverage so for this we will score 70%.
Guidance: 100% - Documented full coverage 99-51% - Value of test coverage from documented results 50% - No indication of code coverage but clearly there is a reasonably complete set of tests 30% - Some tests evident but not complete 0% - No test for coverage seen

How to improve this score

This score can improve by adding tests achieving full code coverage. A clear report and scripts in the software repository will guarantee a high score.

13) Scripts and instructions to run the tests (Y/N)

Answer: Yes
Yes in travis.yml.

14) Report of the results (%)

Answer: 70%
However on page 44 of the ToBits audit is the code coverage. There is no summary but the main files have high coverage so for this we will score 70%, with other details of a test results.
Guidance: 100% - Detailed test report as described below 70% - GitHub Code coverage report visible 0% - No test report evident

How to improve this score

Add a report with the results. The test scripts should generate the report or elements of it.

15) Formal Verification test done (%)

Answer: 100%
A report on the Formal Verification done: https://security.makerdao.com/formal-verification

16) Stress Testing environment (%)

Answer: 100%

Security

This section looks at the 3rd party software audits done. It is explained in this document. This section answers the following questions;
17) Did 3rd Party audits take place? (%) 18) Is the bounty value acceptably high?

17) Did 3rd Party audits take place? (%)

Answer: 100%
Two detailed and comprehensive audits took place on the MakerDao contracts before deployment. Some vulnerabilities were found. We assume these were fixed, but actual evidence of the fixes were not seen. Overall an excellent securities effort.
Guidance:
    1.
    Multiple Audits performed before deployment and results public and implemented or not required (100%)
    2.
    Single audit performed before deployment and results public and implemented or not required (90%)
    3.
    Audit(s) performed after deployment and no changes required. Audit report is public. (70%)
    4.
    No audit performed (20%)
    5.
    Audit Performed after deployment, existence is public, report is not public and no improvements deployed OR smart contract address' not found, question 1 (0%)

18) Is the bounty value acceptably high (%)

Answer: 70%
Bug Bounty Location:
Guidance:
100% Bounty is 10% TVL or at least 1M 90% Bounty is 5% TVL or at least 500k 70% Bounty is 100k or over 40% Bounty is 50k or over 20% Bug bounty program bounty is less than 50k 0% No bug bounty program offered

Access Controls

This section covers the documentation of special access controls for a DeFi protocol. The admin access controls are the contracts that allow updating contracts or coefficients in the protocol. Since these contracts can allow the protocol admins to "change the rules", complete disclosure of capabilities is vital for user's transparency. It is explained in this document. The questions this section asks are as follow;
19) Can a user clearly and quickly find the status of the admin controls? 20) Is the information clear and complete? 2`) Is the information in non-technical terms that pertain to the investments? 22) Is there Pause Control documentation including records of tests?

19) Can a user clearly and quickly find the status of the admin controls (%)

Answer: 20%
The location of the Pause capability is clearly indicated, but no text on the ability to update contracts is found.
Guidance: 100% Clearly labelled and on website, docs or repo, quick to find 70% Clearly labelled and on website, docs or repo but takes a bit of looking 40% Access control docs in multiple places and not well labelled 20% Access control docs in multiple places and not labelled 0% Admin Control information could not be found

20) Is the information clear and complete (%)

Answer: 0%
Guidance: All the contracts are immutable -- 100% OR
All contracts are clearly labelled as upgradeable (or not) -- 30% AND The type of ownership is clearly indicated (OnlyOwner / MultiSig / Defined Roles) -- 30% AND The capabilities for change in the contracts are described -- 30%

21) Is the information in non-technical terms that pertain to the investments (%)

Answer: 0%
Guidance: 100% All the contracts are immutable 90% Description relates to investments safety and updates in clear, complete non-software language 30% Description all in software specific language 0% No admin control information could not be found

22) Is there Pause Control documentation including records of tests (%)

Answer: 80%
Guidance: 100% All the contracts are immutable or no pause control needed and this is explained OR 100% Pause control(s) are clearly documented and there is records of at least one test within 3 months 80% Pause control(s) explained clearly but no evidence of regular tests 40% Pause controls mentioned with no detail on capability or tests 0% Pause control not documented or explained
The contracts that are updateable clearly indicated

Appendices

Author Details

The author of this review is Rex of DeFi Safety.
Email : [email protected]defisafety.com Twitter : @defisafety
I started with Ethereum just before the DAO and that was a wonderful education. It showed the importance of code quality. The second Parity hack also showed the importance of good process. Here my aviation background offers some value. Aerospace knows how to make reliable code using quality processes.
I was coaxed to go to EthDenver 2018 and there I started SecuEth.org with Bryant and Roman. We created guidelines on good processes for blockchain code development. We got EthFoundation funding to assist in their development.
Process Quality Reviews are an extension of the SecurEth guidelines that will further increase the quality processes in Solidity and Vyper development.
DeFiSafety is my full time gig and we are working on funding vehicles for a permanent staff.

Scoring Appendix

Executing Code Appendix

Code Used Appendix

Example Code Appendix

1
contract Vat {
2
// --- Auth ---
3
mapping (address => uint) public wards;
4
function rely(address usr) external note auth { require(live == 1, "Vat/not-live"); wards[usr] = 1; }
5
function deny(address usr) external note auth { require(live == 1, "Vat/not-live"); wards[usr] = 0; }
6
modifier auth {
7
require(wards[msg.sender] == 1, "Vat/not-authorized");
8
_;
9
}
10
11
mapping(address => mapping (address => uint)) public can;
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function hope(address usr) external note { can[msg.sender][usr] = 1; }
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function nope(address usr) external note { can[msg.sender][usr] = 0; }
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function wish(address bit, address usr) internal view returns (bool) {
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return either(bit == usr, can[bit][usr] == 1);
16
}
17
18
// --- Data ---
19
struct Ilk {
20
uint256 Art; // Total Normalised Debt [wad]
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uint256 rate; // Accumulated Rates [ray]
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uint256 spot; // Price with Safety Margin [ray]
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uint256 line; // Debt Ceiling [rad]
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uint256 dust; // Urn Debt Floor [rad]
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}
26
struct Urn {
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uint256 ink; // Locked Collateral [wad]
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uint256 art; // Normalised Debt [wad]
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}
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mapping (bytes32 => Ilk) public ilks;
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mapping (bytes32 => mapping (address => Urn )) public urns;
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mapping (bytes32 => mapping (address => uint)) public gem; // [wad]
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mapping (address => uint256) public dai; // [rad]
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mapping (address => uint256) public sin; // [rad]
36
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uint256 public debt; // Total Dai Issued [rad]
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uint256 public vice; // Total Unbacked Dai [rad]
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uint256 public Line; // Total Debt Ceiling [rad]
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uint256 public live; // Access Flag
41
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// --- Logs ---
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event LogNote(
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bytes4 indexed sig,
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bytes32 indexed arg1,
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bytes32 indexed arg2,
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bytes32 indexed arg3,
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bytes data
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) anonymous;
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51
modifier note {
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_;
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assembly {
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// log an 'anonymous' event with a constant 6 words of calldata
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// and four indexed topics: the selector and the first three args
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let mark := msize // end of memory ensures zero
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mstore(0x40, add(mark, 288)) // update free memory pointer
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mstore(mark, 0x20) // bytes type data offset
59
mstore(add(mark, 0x20), 224) // bytes size (padded)
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calldatacopy(add(mark, 0x40), 0, 224) // bytes payload
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log4(mark, 288, // calldata
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shl(224, shr(224, calldataload(0))), // msg.sig
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calldataload(4), // arg1
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calldataload(36), // arg2
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calldataload(68) // arg3
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)
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}
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}
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// --- Init ---
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constructor() public {
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wards[msg.sender] = 1;
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live = 1;
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}
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// --- Math ---
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function add(uint x, int y) internal pure returns (uint z) {
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z = x + uint(y);
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require(y >= 0 || z <= x);
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require(y <= 0 || z >= x);
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}
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function sub(uint x, int y) internal pure returns (uint z) {
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z = x - uint(y);
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require(y <= 0 || z <= x);
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require(y >= 0 || z >= x);
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}
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function mul(uint x, int y) internal pure returns (int z) {
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z = int(x) * y;
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require(int(x) >= 0);
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require(y == 0 || z / y == int(x));
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}
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function add(uint x, uint y) internal pure returns (uint z) {
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require((z = x + y) >= x);
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}
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function sub(uint x, uint y) internal pure returns (uint z) {
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require((z = x - y) <= x);
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}
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function mul(uint x, uint y) internal pure returns (uint z) {
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require(y == 0 || (z = x * y) / y == x);
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}
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// --- Administration ---
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function init(bytes32 ilk) external note auth {
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require(ilks[ilk].rate == 0, "Vat/ilk-already-init");
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ilks[ilk].rate = 10 ** 27;
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}
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function file(bytes32 what, uint data) external note auth {
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require(live == 1, "Vat/not-live");
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if (what == "Line") Line = data;
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else revert("Vat/file-unrecognized-param");
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}
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function file(bytes32 ilk, bytes32 what, uint data) external note auth {
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require(live == 1, "Vat/not-live");
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if (what == "spot") ilks[ilk].spot = data;
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else if (what == "line") ilks[ilk].line = data;
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else if (what == "dust") ilks[ilk].dust = data;
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else revert("Vat/file-unrecognized-param");
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}
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function cage() external note auth {
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live = 0;
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}
122
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SLOC Appendix

Solidity Contracts

Language
Files
Lines
Blanks
Comments
Code
Complexity
Solidity
13
2155
255
463
1437
301
Comments to Code: 463/ 2155 = 21%

Tests

Language
Files
Lines
Blanks
Comments
Code
Complexity
Solidity
10
3163
460
245
2458
15
Tests to Code 2458/ 1437= 171%
Last modified 5mo ago