Debt DAO contest

Debt DAO contest details

• Total Prize Pool: $115,500 USDC
  • HM awards: $85,000 USDC
  • QA report awards: $10,000 USDC
  • Gas report awards: $5,000 USDC
  • Judge + presort awards: $15,000 USDC
  • Scout awards: $500 USDC
• Join C4 Discord to register
• Submit findings using the C4 form
• Read our guidelines for more details
• Starts November 3, 2022 20:00 UTC
• Ends November 10, 2022 20:00 UTC

C4udit

The C4udit output for the contest can be found here.

Note for C4 wardens: Anything included in the C4udit output is considered a publicly known issue and is ineligible for awards.

Contest setup

Go to our project repo and follow the instructions there (commit hash: code4rena-2022-11-03)

Contact Info

Code4rena discord channel for contest https://discord.gg/bD4nnRwYPN

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Background info

We highly recommend reading our entire docs website https://docs.debtdao.finance/

These are the most relevant sections for Code4rena wardens.

1. Glossary
2. FAQ
3. Contract Architecture Diagram
4. Functions and Methods
5. Known Exploits and Attack Vectors
6. Previous Audit by Halborn
7. Code walkthrough by Debt DAO lead dev Kiba (slightly out of date but all concepts are the same just slightly different code)

Novel Or Nonstandard Mechanisms

1. We charge interest even if a Borrower hasn't drawn down any actual debt. This type of interest is the fRate that a Borrower DAO pays to have access to immediate liquidity. It SHOULD be below the dRate charged when the Borrower does have debt but does not explicitly have to be less.
2. Lender repayment queue. We use the ids array in LineOfCredit.sol to prioritize Lenders that were drawn down on first. They must be paid back first.
3. The Arbiter is a neutral third party that mediates conversations between all Lenders and the Borrower. They have privileged access and are assumed to be honest at all times.
4. The Arbiter can declare a borrower INSOLVENT if there is no collateral left in the collateral Escrow or in the Spigot. This lets all Lenders know that whatever balance they have still deposited into the Line of Credit will never be repaid.
5. The Spigot MUST take ownership of a revenue generating contract. There must be no other access points to the underlying contract. Scenarios are identified under Known Exploits in docs

In Scope For Audit

Special Concerns For Audit

Spigot

Since the Spigot takes ownership of another protocol/DAO's smart contracts to secure their revenue streams (e.g. owning a Yearn vault to ensure vault fees repays Yearn's debt) we want to make sure that the Spigot can't get bricked locking their contract forever, that their contract can't be stolen from the Spigot and that revenue tokens are securely escrowed inside the Spigot for the Owner to claim.

SpigotedLine

Our integration between the Line of Credit and Spigot contracts. It owns the Spigot so it's important that it doesn't lose ownership of the Spigot (unless releaseSpigot() successfully executes) so that it can properly manage and call the Spigot contract. It must be able to trade revenue tokens captured by the Spigot to credit tokens owed to Lenders using 0x protocol.

Smart Contracts

LineOfCredit (478 sloc)

LineOfCredit.sol is the core contract responsible for:

• Inherited by SecuredLine.sol

• Recording credit lines, positions and accounting for Borrowers and Lenders

• Defining Line of Credit terms (Oracle, Arbiter, Borrower, term length, interest rate, escrow and spigot collateral)

• Coordinating the Escrow, Spigot, and InterestRateCredit modules

• External calls to Oracle.sol and InterestRateCredit.sol

• Libraries - LineLib.sol, CreditLib.sol, CreditListLib.sol

SpigotedLine (247 sloc)

• An integration between Spigot.sol and LineOfCredit.sol.

• Inherited by SecuredLine.sol

• It owns the Spigot so it's important that it can properly manage and call Spigot.sol and doesn't lose ownership of it unless releaseSpigot() successfully executes.

• Manages a Spigot's configuration based on the health status of a Line of Credit

• Trades a DAO's Revenue Tokens for Credit Tokens owed to lenders using 0x protocol

• Stores excess revenue or trade slippage in 'unused' tokens for later use in repayment

• Allows Borrowers to clawback escrowed tokens if a Line of Credit is fully repaid

• Allows liquidating 'unused' tokens or the Spigot itself if a Line of Credit's status is LIQUIDATABLE

• External calls to - 0x protocol, Spigot.sol

• Libraries - LineLib.sol, SpigotedLineLib.sol

EscrowedLine (60 sloc)

EscrowedLine.sol is an abstract contract holding all the collateral of a Borrower.

• Inherited by SecuredLine.sol

• It doesn't contain any external functions.

• Allows an Arbiter to liquidate collateral if the Line of Credit's status is LIQUIDATABLE

• Updates a Line of Credit's status based on the latest collateral ratio vs minimum collateral ratio (in Escrow.sol)

• External calls to - Escrow.sol

• Libraries - LineLib.sol

SecuredLine (98 sloc)

• Combines the logic of LineofCredit.sol, EscrowedLine.sol, and SpigotedLine.sol to create a fully secured lending solution.

• Allows transferring all collateral to a new Line of Credit contract

• External calls to - Oracle.sol, InterestRateCredit.sol, EscrowedLine.sol, Spigot.sol, 0x protocol

• Libraries - LineLib.sol, SpigotedLineLib.sol

LineFactory (179 sloc)

• Deploys SecurdLine, Spigot, and Escrow contracts
• Has functions for default deployments and with custom config for borrower/lenders
• After deploying SecuredLine's ensures that modules are configured properly and Line is ACTIVE

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Escrow (114 sloc)

• Allows a Borrower to deposit tokens as collateral for a Line of Credit

• Allows a Borrower to withdraw collateral so long as that actions does't cause the status of a Line of Credit to be LIQUIDATABLE

• Allows Arbiter to whitelist (enable) specific collateral allowed for a Line of Credit

• Allows Arbiter to liquidate collateral if the status is LIQUIDATABLE

• External calls to - Oracle.sol, LineOfCredit.sol

• Libraries - LineLib.sol, CreditLib.sol, EscrowLib.sol

Spigot (190 sloc)

• Takes full ownership of a DAO or a protocol's contracts to escrow revenue earned by them

• Allows the Spigot Owner to pull escrowed funds at anytime

• Allows arbitrary payment splits between Spigot Owner and the Spigot Treasury (a contract of the DAO/protocol

• Allows updating stakeholder addresses

• External calls to arbitrary contract with arbitrary calls

• Libraries - SpigotLib.sol, LineLib.sol

Oracle (24 sloc)

• A wrapper contract to simplify integration with Chainlink FeedRegistry

• Returns all token prices in USD 8-decimal denomination

• External calls to - Chainlink FeedRegistry

• Libraries - Chainlink Denominations

InterestRateCredit (72 sloc)

• Stores interest rates and the last time interest was accrued for individual Lender positions on a Line of Credit
• Purely calculates interest owed. LineOfCredit.sol is responsible for updating balances
• Only allows LineOfCredit.sol to call it

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LineLib (79 sloc)

• Stores basic functions for LineOfCredit e.g. health statuses and transferring tokens

CreditLib (208 sloc)

• Stores basic functions for interacting with Lender positions e.g. computing ids for individual credit lines, accruing interest and repaying debt

CreditListLib (53 sloc)

• Stores functionality for interacting with collections of Lender positions on a Line of Credit e.g. adding and removing positions or re-sorting positions in the repayment queue

EscrowLib (183 sloc)

• Calculates the total value of collateral assets escrowed
• Calculates collateral ratio based on collateral value
• Ensures that whitelisted (enabled) collateral enabled has a price feed

MutualConsent (48 sloc)

• Forked from https://github.com/IndexCoop/index-coop-smart-contracts/blob/1acec44229b3aaf4a40dad2095b0cc6accb8fbfc/contracts/lib/MutualUpgrade.sol
• Essentially a 2/2 multisig baked into your contract
• Ensures that two predefined addresses both sign a tx with the same inputs and then executes the function with those parameters.

SpigotLib (212 sloc)

• Stores functionality for claiming revenue, updating revenue splits, updating stakeholder addresses and all other Spigot functions

SpigotedLine.Lib (187 sloc)

• Stores functionality related to including Spigot in Line of Credit lifecycle

Out of Scope For Audit

1. Anything related to the Arbiter
2. While the Oracle contract is in scope, anything related to the Oracle within the system and its privileged access, reliability, honest answers, etc. is out of scope.