Party DAO - catellatech's results

Party Protocol Smart Contracts Analysis

Index

• Party Protocol Smart Contracts Analysis
  • Index
  • 1. Party Protocol: A Comprehensive Overview
    • The protocol has two primary phases:
  • 2. Main Contracts and Their Analysis Through Diagrams
    • Party Protocol Scope:
      • InitialETHCrowdfund.sol:
      • ETHCrowdfundBase.sol:
      • PartyGovernance.sol:
      • PartyGovernanceNFT.sol:
      • ProposalExecutionEngine.sol:
      • ProposalStorage.sol:
      • SetGovernanceParameterProposal.sol:
      • SetSignatureValidatorProposal.sol:
      • OffChainSignatureValidator.sol:
      • Implementation.sol:
  • 3. Approach taken in evaluating the codebase
  • 4. Party Protocol: Architecture
  • 5. Systemic and Centralization Risks
    • Systematic Risks:
    • Centralization Risks:
  • 7. Security Approach of the Project
  • 8. Test analysis
  • 9. Conclusion

1. Party Protocol: A Comprehensive Overview

The Party Protocol aims to establish a standard for group coordination, providing on-chain functionality for essential group behaviors.

• These behaviors include:

  1. Formation: Bringing a group together and pooling resources.
  2. Coordination: Making collective decisions and taking actions.
  3. Distribution: Sharing resources among group members.

The protocol has two primary phases:

• Crowdfund and Governance.

  1. Crowdfund: In this phase, users contribute ETH to become members of a group (Party), granting them voting rights and proportional ownership of the Party.

  2. Governance: In the governance phase, Party members can create and vote on proposals to execute actions as a group.

Contributions during the Crowdfund phase are a primary means of creating and joining Parties. Crowdfund contracts enable groups to pool resources in various ways and can be tailored to specific behaviors (e.g., acquiring NFTs, raising ETH for a treasury, etc.).

The Crowdfund phase focuses on forming and financing Parties, while the Governance phase involves decision-making and action execution as a group.

2. Main Contracts and Their Analysis Through Diagrams

Party Protocol Scope:

InitialETHCrowdfund.sol:

• The contract it is used to conduct an initial fundraising for creating new Parties or groups.

ETHCrowdfundBase.sol:

• The base contract for InitialETHCrowdfund

PartyGovernance.sol:

• This contract serves as the foundation for the Party contract within the protocol. It encapsulates the essential governance logic governing the behavior of parties.

PartyGovernanceNFT.sol:

• This contract serves as the foundational logic for tokens within the Party protocol, and it is inherited by the Party contract, which is the core component of the protocol.

ProposalExecutionEngine.sol:

• This contract is invoked via delegatecall by parties to handle the execution logic associated with proposals. Parties also implement a fallback function that performs a static delegate call to interact with the ProposalExecutionEngine.

ProposalStorage.sol:

• This contract facilitates communication and data management between the PartyGovernance and ProposalExecutionEngine contracts.

SetGovernanceParameterProposal.sol:

• A new proposal type that allows setting governance parameters for the party.

SetSignatureValidatorProposal.sol:

• Abstract contract that handles proposals related to setting or updating signature validators for specific signature hashes.

OffChainSignatureValidator.sol:

• This contract provides a mechanism for parties in the Party protocol to validate off-chain signatures. It checks the validity of the signature, ensures the signer is a member of the party with sufficient voting power, and applies a customizable signing threshold for added security.

Implementation.sol:

• This contract serves as a utility for implementation contracts utilized through a proxy. It offers helper functions designed to facilitate the interaction between implementation contracts and their proxies.

3. Approach taken in evaluating the codebase

• High-level overview : I analyzed the overall codebase in one iteration to get a high-level understanding of the code structure and functionality.

• Documentation review : I studied the documentation to understand the purpose of each contract, its functionality, and how it is connected with other contracts.

• Literature review : I read old audits and known findings, as well as the bot races findings.

• Testing setup : I set up my testing environment and ran the tests to ensure that all tests passed. Used yarn and hardhat to test this protocol or foundry as well.

• Detailed analysis : I started with the detailed analysis of the code base, line by line. I took the necessary notes to ask some questions to the sponsors.

4. Party Protocol: Architecture

The architecture is designed to enable the decentralized creation and management of groups (Parties) through participation in crowdfunds. Each type of crowdfund has specific logic for its purpose, and the Party contract acts as the core for governance and party asset management.

• There is always room for improvements and optimizations in the architectural design.

  • Usability: Simplify the user experience as much as possible, from participating in crowdfunds to managing governance and party assets.

  • Monitoring and Analytics: Implement monitoring and analytics tools to better understand protocol behavior and provide valuable insights for decision-making.

  • User-Friendliness: The architecture should be as intuitive as possible for end-users. This might involve a more user-friendly user interface or the automation of processes that currently require manual action.

  • Education and Outreach: Ensuring that users fully understand how the architecture works and how they can get the most out of it is essential. This could include educational resources and a robust documentation base.

5. Systemic and Centralization Risks

Systematic Risks:

• Inefficient Governance: Incapacity to make efficient and fair decisions through the governance process could result in stagnation or suboptimal decisions.

• Limited Interoperability: Lack of interoperability with other protocols may limit users' options and flexibility.

Centralization Risks:

• Centralized Development: If development and decision-making are centralized in a small group, there is a risk that decisions may not adequately reflect the needs of the community.

• Token Concentration: If a small group of participants holds a significant amount of tokens, they could have a disproportionate influence on decision-making and governance.

• Power Concentration in Gatekeepers: If gatekeeping functions are centralized, the power to allow or restrict participation could be misused.

7. Security Approach of the Project

What the project can add in the understanding of Security;

• By distributing the project to testnets, ensuring that the audits are carried out in onchain audit.

• Pause Mechanism This is a chaotic situation, which can be thought of as a choice between decentralization and security.

• Add On-Chain Monitoring System; If On-Chain Monitoring systems such as Forta are added to the project, its security will increase.

For example ; This bot tracks any DEFI transactions in which wrapping, unwrapping, swapping, depositing, or withdrawals occur over a threshold amount. If transactions occur with unusually high token amounts, the bot sends out an alert. https://app.forta.network/bot/0x7f9afc392329ed5a473bcf304565adf9c2588ba4bc060f7d215519005b8303e3

• After the Code4rena audit is completed and the project is live, I recommend the audit process to continue, projects like immunefi do this. https://immunefi.com/

8. Test analysis

The audit scope of the contracts to be reviewed is 62%, with the aim of reaching 100% to increase the safety.

9. Conclusion

The Party Protocol is designed to streamline group coordination on the blockchain, fostering the creation of groups, facilitating decision-making processes, and ensuring efficient resource distribution. Notably, it refrains from engaging with ERC20 tokens employing rebase or transfer fees. Instead, it seamlessly integrates with a diverse array of ERC721 tokens possessing liquidity and listings on platforms such as OpenSea.

This protocol is set to launch on both the Ethereum Mainnet and Base Mainnet, embodying two pivotal roles of trust: Hosts, endowed with the authority to veto proposals and configure "Rage Quit" and Authorities, possessing root access for managing sensitive operations.

Emphasizing security measures against denial-of-service attacks, the protocol anticipates strict adherence to multiple Ethereum Improvement Proposals. This commitment ensures harmonious interoperability with other projects within the Ethereum network, enhancing overall compatibility.

Time spent:

15 hours