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MakerDAO

82%

Previous versions

Process Quality Review (0.9)

MakerDAO

Final score:82%
Date:08 Nov 2023
Audit Process:version 0.9
Author:Rex
PQR Score:82%

PASS

Protocol Website:https://makerdao.com/en/

Scoring Appendix

The final review score is indicated as a percentage. The percentage is calculated as Achieved Points due to MAX Possible Points. For each element the answer can be either Yes/No or a percentage. For a detailed breakdown of the individual weights of each question, please consult this document.

The blockchain used by this protocol
Ethereum
#QuestionAnswer
83%
1.100%
2.Yes
3.100%
4.0%
92%
5.Yes
6.100%
7.100%
8.60%
9.100%
73%
10.100%
11.50%
12.0%
13.Yes
93%
14.100%
15.100%
16.70%
17.100%
18.25%
63%
19.80%
20.50%
21.40%
22.30%
23.100%
100%
24.Yes
25.100%
26.Yes
Total:82%

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 contract on the blockchain(s)
  • Here is the documentation that explains what my smart contracts do
  • Here are the tests I ran to verify my smart contracts
  • Here are all the security steps I took to safeguard these contracts
  • Here is an explanation of the control I have to change these smart contracts
  • Here is how these smart contracts get information from outside the blockchain (if applicable)

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 2023. Permission is given to copy in whole, retaining this copyright label.

Code and Team

83%

This section looks at the code deployed on the relevant chains and team aspects. The document explaining these questions is here.

1. Are the smart contract addresses easy to find? (%)

Answer: 100%

The Maker Protocol provides all of its smart contract addresses and their Application Binary Interfaces (ABIs) in a centralized location, the Chainlog (chainlog.makerdao.com). The Chainlog provides information for both the Ethereum Mainnet and the Ethereum Goerli Testnet. It provides contract addresses with links to Etherscan and their respective ABIs. This information is easily accessible and clearly labeled, meeting the criteria for a 100% score.  

Percentage Score Guidance:
100%
Clearly labelled and on website, documents or repository, 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 labeling not clear or easy to find
0%
Executing addresses could not be found

2. Does the protocol have a public software repository? (Y/N)

Answer: Yes

The protocol's documentation mentions the use of Github for hosting their codebase. This suggests that they have a public software repository on Github.  

Score Guidance:
Yes
There is a public software repository with the code at a minimum, but also normally test and scripts. Even if the repository was created just to hold the files and has just 1 transaction.
No
For teams with private repositories.

3. Is the team public (not anonymous)?

Answer: 100%

Multiple contributors to the GitHub repository are public.

Percentage Score Guidance:
100%
At least two names can be easily found in the protocol's website, documentation or medium. These are then confirmed by the personal websites of the individuals / their linkedin / twitter.
50%
At least one public name can be found to be working on the protocol.
0%
No public team members could be found.

4. How responsive are the devs when we present our initial report?

Answer: 0%

Devs did not respond to our comment on the #developers of their discord for 3 days.

Percentage Score Guidance:
100%
Devs responded within 24hours
75%
Devs responded within 48 hours
50%
Devs responded within 72 hours
25%
Data not entered yet
0%
no dev response within 72 hours

Code Documentation

92%

This section looks at the software documentation. The document explaining these questions is here.

5. Is there a whitepaper? (Y/N)

Answer: Yes
Score Guidance:
Yes
There is an actual whitepaper or at least a very detailed doc on the technical basis of the protocol.
No
No whitepaper. Simple gitbook description of the protocol is not sufficient.

6. Is the protocol's software architecture documented? (%)

Answer: 100%

Excellent architecture documentation is included.

Percentage Score Guidance:
100%
Detailed software architecture diagram with explanation
75%
Basic block diagram of software aspects
0%
No software architecture documentation

7. Does the software documentation fully cover the deployed contracts' source code? (%)

Answer: 100%

Maker's documentation is impressive and covers all deployed contracts in a highly organized fashion.

Percentage Score 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

8. Is it possible to trace the documented software to its implementation in the protocol's source code? (%)

Answer: 60%

There is clear association from the documents to the code, but there is no explicit traceability to the implementation.

Percentage Score Guidance:
100%
will be Requirements with traceability to code and to tests (as in avionics DO-178)
90%
on formal requirements with some traceability
80%
for good autogen docs https://developers.morpho.xyz/
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

9. Is the documentation organized to ensure information availability and clarity? (%)

Answer: 100%

Organization and clarity is excellent.

Percentage Score Guidance:
100%
Information is well organized, compartmentalized and easy to navigate
50%
information is decently organized but could use some streamlining
0%
information is generally obfuscated

Testing

73%

This section covers the testing process of the protocol’s smart contract code previous to its deployment on the mainnet. The document explaining these questions is here.

10. Has the protocol tested their deployed code? (%)

Answer: 100%

As per the SLOC, there is 222% testing to code (TtC).

Percentage Score 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

11. How covered is the protocol's code? (%)

Answer: 50%

Code coverage is mentioned, but proof could not be found. Nevertheless, there's evidently heavy testing on this protocol.

Percentage Score 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 complete set of tests
30%
Some tests evident but not complete
0%
No test for coverage seen

12. Is there a detailed report of the protocol's test results?(%)

Answer: 0%

Code coverage is mentioned, but proof could not be found. Nevertheless, there's evidently heavy testing on this protocol.

Percentage Score Guidance:
100%
Detailed test report as described below
70%
GitHub code coverage report visible
0%
No test report evident

13. Has the protocol undergone Formal Verification? (Y/N)

Answer: Yes

The protocol had runtime formal verification performed.

Score Guidance:
Yes
Formal Verification was performed and the report is readily available
No
Formal Verification was not performed and/or the report is not readily available.

Security

93%

This section looks at the 3rd party software audits done. It is explained in this document.

14. Is the protocol sufficiently audited? (%)

Answer: 100%

The protocol has undergone multiple audits prior to deployment. The documentation provides transparency to the community with respect to the results of the Multi Collateral Dai (MCD) Audits, Bug Bounty Program, and Formal Verification. These audits are publicly accessible, and any feedback from these audits have been implemented by the protocol's developers. This is evident from the regular updates on MCD Security Roadmap and the publication of the Runtime Verification Audit. Therefore, the quality and adequacy of the protocol's smart contract audits are high.  

Percentage Score Guidance:
100%
Multiple Audits performed before deployment and the audit findings are public and implemented or not required
90%
Single audit performed before deployment and audit findings are public and implemented or not required
70%
Audit(s) performed after deployment and no changes required. The Audit report is public.
65%
Code is forked from an already audited protocol and a changelog is provided explaining why forked code was used and what changes were made. This changelog must justify why the changes made do not affect the audit.
50%
Audit(s) performed after deployment and changes are needed but not implemented.
30%
Audit(s) performed are low-quality and do not indicate proper due diligence.
20%
No audit performed
0%
Audit Performed after deployment, existence is public, report is not public OR smart contract address' not found.
Deduct 25% if the audited code is not available for comparison.

15. Is there a matrix of audit applicability on deployed code (%)? Please refer to the example doc for reference.

Answer: 100%

No explicit matrix of audit applicability was found. However, there are a small number of audits and all are clearly applicable to the multi-collateral DAI deployed. For this reason the intent is met and a 100% score is given.

Percentage Score Guidance:
100%
Current and clear matrix of applicability
50%
Out of date matrix of applicability
0%
no matrix of applicability

16. Is the bug bounty value acceptably high (%)

Answer: 70%

MakerDAO initiated the Bug Bounty program privately for selected researchers (Private testnet on June 3rd). This does not count based on our process. They launched a public bu bouty program through HackerOne. With a top payout of 100k, this scores 70% as per our guidance.  

Percentage Score 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
60%
Bounty is 100k or over
50%
Bounty is 50k or over AND active program
40%
Bounty is 50k or over
20%
Bug bounty program bounty is less than 50k
0%
No bug bounty program offered / the bug bounty program is dead
An active program means that a third party (such as Immunefi) is actively driving hackers to the site. An inactive program would be static mentions on the docs.

17. Is there documented protocol monitoring (%)?

Answer: 100%

Maker is a very mature protocol where dynamic on chain variations can have significant impacts on the protocol. For this reasoning bots for may aspects have always been a big part of the protocol, such as auction keepers and market maker keepers.

Percentage Score Guidance:
100%
Multiple Audits performed before deployment and results public and implemented or not required
80%
Documentation covering protocol specific threat monitoring
60%
Documentation covering generic threat with incident response
40%
Documentation covering operational monitoring with incident response
0%
No on chain monitoring
Add 20% for documented incident response process

18. Is there documented protocol front-end monitoring (%)?

Answer: 25%

Based on the provided sources, there is evidence of one out of four security measures. The documentation mentions that the website is protected by Cloudflare, which provides DDoS protection. However, there are no explicit mentions of DNS steps to protect the domain, intrusion detection protection on the front end, or unwanted front-end modification detection.  

Percentage Score Guidance:
25%
DDOS Protection
25%
DNS steps to protect the domain
25%
Intrusion detection protection on the front end
25%
Unwanted front-end modification detection

Admin Controls

63%

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.

19. Is the protocol code immutable or upgradeable? (%)

Answer: 80%

The code is upgradeable via spells which have timelocks and roles and it executes automatically based on MKR votes.

Percentage Score Guidance:
100%
Fully Immutable
80%
Updateable with Timelock > 1wk
50%
Updateable code with Roles
30%
Updateable code MultiSig
0%
Updateable code via EOA
Pause control does not impact immutability

20. Is the protocol's code upgradeability clearly explained in non technical terms? (%)

Answer: 50%

50% Code is upgradeable with minimal explanation. The detailed documentation on spells does not clearly describe the capability. The language is very specific and would not be clear to an finance person without extensive MAKER experience.

Percentage Score Guidance:
100%
Code is Immutable and clearly indicated so in documentation OR
100%
Code is upgradeable and clearly explained in non technical terms
50%
Code is upgradeable with minimal explanation
50%
Code is immutable but this is not mentioned clearly in the documentation
0%
No documentation on code upgradeability

21. Are the admin addresses, roles and capabilities clearly explained? (%)

Answer: 40%

Evidently all code changes are executed via spells. Spells are automatically executed after a MKR vote, meaning their are no admins. This not clearly explained. The language is very protocol specific.    The provided documents contain information about various aspects of the protocol but do not specifically detail the admin addresses, roles, and capabilities. While the documentation does provide in-depth details about contract mechanisms, parameters, and authorizations, it does not clearly define or explain the roles and capabilities of admins within the protocol. The information appears to be dispersed and fragmented, requiring further investigation and potential inference to identify admin-related details.  

Percentage Score Guidance:
100%
Admin addresses, roles and capabilities clearly explained OR
100%
If immutable code and no changes possible, no admins required
80%
Admin addresses, roles and capabilities incompletely explained but good content
40%
Admin addresses, roles and capabilities minimally explained, information scattered
0%
No information on admin addresses, roles and capabilities

22. Are the signers of the admin addresses clearly listed and provably distinct humans? (%)

Answer: 30%

Evidently all code changes are executed via spells. Spells are automatically executed after a MKR vote, meaning their are no signers per say.     The detailed documentation on spells is not clear on this even after it is explained, you cannot find clear words in the documentation.    

Percentage Score Guidance:
100%
All signers of the admin addresses are clearly listed and provably distinct humans OR
100%
If immutable code and no changes possible, therefore no admins
60%
All signers of the admin addresses are clearly listed
30%
Some signers of the admin addresses are listed
0%
No documentation on the admin addresses

23. Is there a robust documented transaction signing policy? Please refer to the Example doc for reference.(%)

Answer: 100%

Evidently all code changes are executed via spells. Spells are automatically executed after a MKR vote, meaning their are no signers per say. For this reason a transaction signing policy is not required and a 100% score is given.    The provided documentation does not appear to contain a transaction signing policy as outlined in the research instructions. The documentation mainly focuses on the operation and governance of the protocol, but does not provide any specific procedures or requirements for transaction signing, such as the use of specific wallets, browsers, or VPNs, or requirements for the physical and digital environments in which transactions are initiated and executed.  

Percentage Score Guidance:
100%
If immutable and no changes possible
80%
Robust transaction signing process (7 or more elements)
70%
Adequate transaction signing process (5 or more elements)
60%
Weak transaction signing process (3 or more elements)
0%
No transaction signing process evident
Evidence of audits of signers following the process add 20%

Oracles

100%

This section goes over the documentation that a protocol may or may not supply about their Oracle usage. Oracles are a fundamental part of DeFi as they are responsible for relaying tons of price data information to thousands of protocols using blockchain technology. Not only are they important for price feeds, but they are also an essential component of transaction verification and security. These questions are explained in this document.

24. Are Oracles relevant? (Y/N)

Answer: Yes
Score Guidance:
Yes
The protocol uses Oracles and the next 2 questions are relevant
No
If the protocol does not use Oracles, then the answer is No and the Oracle questions will not be answered or used in the final score for this protocol

25. Is the protocol's Oracle sufficiently documented? (%)

Answer: 100%

The protocol's Oracle is sufficiently documented. The Maker Protocol's Oracle Module is thoroughly outlined in the technical documentation which includes details on its core components, Median and OSM contracts. It provides information on the function of the Oracle Module, which is deployed for each collateral type and feeds price data for a corresponding collateral type to the Vat. The documentation also explains the mechanism of the Oracle, which includes the whitelisting of addresses and how price updates are broadcasted off-chain, fed into a median, and then pulled into the OSM. Additional details are provided in the Median - Detailed Documentation which explains the function and behavior of the median in the Oracle Module.  

Percentage Score Guidance:
100%
The Oracle is specified. The contracts dependent on the oracle are identified. Basic software functions are identified (if the protocol provides its own price feed data). Timeframe of price feeds are identified.
75%
The Oracle documentation identifies both source and timeframe but does not provide additional context regarding smart contracts.
60%
Only the Oracle source is identified.
0%
No oracle is named / no oracle information is documented.

26. Can flashloan attacks be applied to the protocol, and if so, are those flashloan attack risks mitigated? (Y/N)

Answer: Yes

The Maker Protocol has implemented a Flash Mint Module which allows anyone to mint DAI up to a limit set by Maker Governance with the condition that they pay it all back in the same transaction with a fee. While this could potentially open up the protocol to flashloan attacks, the module has been designed in a way to exploit arbitrage opportunities without having to commit upfront capital. This makes the DeFi space safer overall as it allows for exploits requiring a large amount of capital to be found quicker. The fees also provide an income source for the protocol. Therefore, the protocol has implemented countermeasures against flashloan attacks.  

Score Guidance:
Yes
The protocol's documentation includes information on how they mitigate the possibilities and extents of flash loan attacks.
No
The protocol's documentation does not include any information regarding the mitigation of flash loan attacks.