Finished Reviews

Synthetix PQ Review

Score: 85%

Overview

This is a Synthetix Exchange Process Quality Review completed on 27 April, 2021. It was performed using the Process Review process (version 0.7) and is documented here. The previous version (using 0.5) of this review is here. The review was performed by Rex of DeFiSafety. Check out our Telegram.

The final score of the review is 85%, 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/access 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.

Chain: Ethereum

Guidance: Ethereum Binance

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%

Actually finding the addresses was not immediately direct, but was simple enough. There is no developer page on the website. After clicking on the GitHub icon on the footer of the webpage and reading the "readme" file, I could link to the docs for synthetics. From their the addresses were clearly in the Developer Resource section. The page has all the details that could be desired.

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 https://docs.synthetix.io/addresses/ 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 well over 10 internal transactions a day on contract Address Resolver, 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

GitHub: https://github.com/Synthetixio/synthetix

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 3,783 commits and 155 branches, this is a very 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

The teams names and roles are clearly in the GitHub repo.

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

Location: https://docs.synthetix.io/litepaper/

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

Answer: Yes

Location: https://docs.synthetix.io/contracts/source/contracts/BaseRewardEscrowV2/

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

Answer: 100%

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: 65%

he first impression is to give a very high score for commenting because comments are clear, detailed and included where they add value. The percentage of code to commenting is actually low compared to many other applications at 31%. Numbers in excess of 70% have been seen on well-documented other applications. Part of the reason may be that there is just so much code included. At 9,000 lines over 45 modules this is one of the largest applications audited to date. Based on the commenting the code percentage score of about 45% would be in line with other audits. Given the quality I will increase it to 65%.

Code examples are in the Appendix. As per the SLOC, there is 31% 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

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

Answer: 100%

Each function is clearly documented. Next of the documentation is a link directly to the source code. This is exactly the type of traceability we are looking for.

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

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) Packaged with the deployed code (Y/N) 15) Report of the results (%) 16) Formal Verification test done (%) 17) Stress Testing environment (%)

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

Answer: 100%

Clearly there is a full test suite. Test line to code ratio is 375%

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: 96%

Code coverage for the deployed release is 96% as per GitHub CodeCov.

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

Sythetix has a full document on their automated test procedures.

How to improve this score

Add the scripts to the repository and ensure they work. Ask an outsider to create the environment and run the tests. Improve the scripts and docs based on their feedback.

14) Report of the results (%)

Answer: 70%

The automated code coverage report answers most of the questions. What is missing is a stand alone report indicating the pass of all tests and describing the few misses. But clearly, most questions are answered.

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: 0%

No evidence of Formal Verification was found.

16) Stress Testing environment (%)

Answer: 100%

The address page includes test addresses for Ropsten, Rinkeby and Kovan. The Ropsten address' at a minimum are still in regular use.

Security

This section looks at the software security available. 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%

The audit history page shows regular audits taking place. There were two audits in 2021 and eight audits in 2020 alone (before mid-August) from two independent auditors. The audit results and documentation appears meticulous and complete.

Guidance: 100% Multiple Audits performed before deployment and results public and implemented or not required 90% Single audit performed before deployment and results public and implemented or not required 70% Audit(s) performed after deployment and no changes required. Audit report is public 20% No audit performed 0% Audit Performed after deployment, existence is public, report is not public and no improvements deployed OR smart contract address' not found, question

18) Is the bounty value acceptably high (%)

Answer: 70%

200k active program

Location: https://docs.synthetix.io/incentives/#bug-bounty and https://immunefi.com/bounty/synthetix/

Guidance:

100% Bounty is 10% TVL or at least $1M AND active program (see below) 90% Bounty is 5% TVL or at least 500k AND active program 80% Bounty is 5% TVL or at least 500k 70% Bounty is 100k or over AND active program 50% 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? 21) 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: 100%

Location: https://docs.synthetix.io/governance/

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: 40%

Clearly the contracts are upgradeable, which is clearly mentioned in the Governance section but it never says exactly which so implicitly it is all. So score 20%

The type of Ownership is clearly effectively Only Owner as the foundation controls all updates except I saw other articles that said the foundation was replaced by DAO's but there are no links to DAO's, so score 10%

The capabilities for change seem very high, but no limits are mentioned. There are no specifics, so score 10%

Final score = 20+10+10 = 40%

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%

How to improve this score

Create a document that covers the items described above. An example is enclosed.

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

Answer: 0%

There is no information on the capabilities of the admin controls or their impact on investments.

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

How to improve this score

Create a document that covers the items described above in plain language that investors can understand. An example is enclosed.

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

Answer: 0%

No pause controls are mentioned.

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

How to improve this score

Create a document that covers the items described above in plain language that investors can understand. An example is enclosed.

Appendices

Author Details

The author of this review is Rex of DeFi Safety.

Email : [email protected] 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. We started in May 2021, just before DeFi summer.

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

// https://docs.synthetix.io/contracts/FeePool
contract FeePool is Owned, Proxyable, SelfDestructible, LimitedSetup, MixinResolver, IFeePool {
using SafeMath for uint;
using SafeDecimalMath for uint;
// Exchange fee may not exceed 10%.
uint public constant MAX_EXCHANGE_FEE_RATE = 1e18 / 10;
// Where fees are pooled in sUSD.
address public constant FEE_ADDRESS = 0xfeEFEEfeefEeFeefEEFEEfEeFeefEEFeeFEEFEeF;
// sUSD currencyKey. Fees stored and paid in sUSD
bytes32 private sUSD = "sUSD";
// This struct represents the issuance activity that's happened in a fee period.
struct FeePeriod {
uint64 feePeriodId;
uint64 startingDebtIndex;
uint64 startTime;
uint feesToDistribute;
uint feesClaimed;
uint rewardsToDistribute;
uint rewardsClaimed;
}
// A staker(mintr) can claim from the previous fee period (7 days) only.
// Fee Periods stored and managed from [0], such that [0] is always
// the current active fee period which is not claimable until the
// public function closeCurrentFeePeriod() is called closing the
// current weeks collected fees. [1] is last weeks feeperiod
uint8 public constant FEE_PERIOD_LENGTH = 2;
FeePeriod[FEE_PERIOD_LENGTH] private _recentFeePeriods;
uint256 private _currentFeePeriod;
// How long a fee period lasts at a minimum. It is required for
// anyone to roll over the periods, so they are not guaranteed
// to roll over at exactly this duration, but the contract enforces
// that they cannot roll over any quicker than this duration.
uint public feePeriodDuration = 1 weeks;
// The fee period must be between 1 day and 60 days.
uint public constant MIN_FEE_PERIOD_DURATION = 1 days;
uint public constant MAX_FEE_PERIOD_DURATION = 60 days;
// Users are unable to claim fees if their collateralisation ratio drifts out of target treshold
uint public targetThreshold = (1 * SafeDecimalMath.unit()) / 100;
/* ========== MUTATIVE FUNCTIONS ========== */
/**
* @notice Logs an accounts issuance data per fee period
* @param account Message.Senders account address
* @param debtRatio Debt percentage this account has locked after minting or burning their synth
* @param debtEntryIndex The index in the global debt ledger. synthetixState.issuanceData(account)
* @dev onlyIssuer to call me on synthetix.issue() & synthetix.burn() calls to store the locked SNX
* per fee period so we know to allocate the correct proportions of fees and rewards per period
*/
function appendAccountIssuanceRecord(
address account,
uint debtRatio,
uint debtEntryIndex
) external onlyIssuer {
feePoolState().appendAccountIssuanceRecord(
account,
debtRatio,
debtEntryIndex,
_recentFeePeriodsStorage(0).startingDebtIndex
);
emitIssuanceDebtRatioEntry(account, debtRatio, debtEntryIndex, _recentFeePeriodsStorage(0).startingDebtIndex);
}
/**
* @notice Set the fee period duration
*/
function setFeePeriodDuration(uint _feePeriodDuration) external optionalProxy_onlyOwner {
require(_feePeriodDuration >= MIN_FEE_PERIOD_DURATION, "value < MIN_FEE_PERIOD_DURATION");
require(_feePeriodDuration <= MAX_FEE_PERIOD_DURATION, "value > MAX_FEE_PERIOD_DURATION");
feePeriodDuration = _feePeriodDuration;
emitFeePeriodDurationUpdated(_feePeriodDuration);
}

SLOC Appendix

Solidity Contracts

Language

Files

Lines

Blanks

Comments

Code

Complexity

Solidity

45

9218

1771

1764

5683

546

Comments to Code 1764 / 5683 = 31%

Javascript Tests

Language

Files

Lines

Blanks

Comments

Code

Complexity

JavaScript

42

26,743

3534

1855

21,354

477

Comments to Code 1764 / 5683 = 31%