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Hegic V8888

31%

Previous versions

Process Quality Review (0.7)

Hegic V8888

Final score:31%
Date:07 Oct 2021
Audit Process:version 0.7
Author:Nick of DeFiSafety
PQR Score:31%

FAIL

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
54%
1.100%
2.40%
3.Yes
4.0%
5.No
17%
6.Yes
7.No
8.0%
9.57%
10.0%
65%
11.100%
12.47%
13.Yes
14.0%
15.0%
16.100%
18%
17.20%
18.0%
0%
19.0%
20.0%
21.0%
22.0%
Total:31%

Very simply, the audit looks for the following declarations from the developer's site. With these declarations, it is reasonable to trust the smart contracts.

  • Here is my smart contract on the blockchain
  • You can see it matches a software repository used to develop the code
  • Here is the documentation that explains what my smart contract does
  • Here are the tests I ran to verify my smart contract
  • Here are the audit(s) performed to review my code by third party experts

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

54%

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.

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

Answer: 100%

They are available at website https://hegic.gitbook.io/start/developers/contracts, as indicated in the Appendix.

Percentage Score 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 labeling not clear or easy to find
0%
Executing addresses could not be found

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

Answer: 40%

Activity is 10 transactions a month on contract Hegic WBTC Options Contract (mainnet) 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 also normally test and scripts. Even if the repository was created just to hold the files and has just 1 transaction, it gets a "Yes". For teams with private repositories, this answer is "No"

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.

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

Answer: 0%

At just two branches and 23 commits, Hegic's development history is not one we'd hedge our bets with.

This metric 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).

Percentage Score 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 30 commits

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

Answer: No

Location: The anonymous Molly Wintermute is the creator of Hegic.

For a "Yes" in this question, the real names of some team members must be public on the website or other documentation (LinkedIn, etc). If the team is anonymous, then this question is a "No".

Documentation

17%

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

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

Answer: Yes

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

Answer: No

There are no software functions in the Hegic documentation.

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

Answer: 0%

Contracts are identified, but there is no software function documentation. The diagram provides insufficient detail to explain how the contracts operate.

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

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

Answer: 57%

Code examples are in the Appendix. As per the SLOC, there is 57% commenting to code (CtC).

The Comments to Code (CtC) ratio is the primary metric for this score.

Percentage 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: 0%

The documentation lists the functions but does not describe them.

Percentage Score 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

65%

11. Full test suite (Covers all the deployed code) (%)

Answer: 100%

Code examples are in the Appendix. As per the SLOC, there is 194% testing to code (TtC).

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.

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

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

Answer: 47%

Tests for code coverage gave back 47.36%.

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

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

Answer: Yes

Scripts/Instructions location: https://github.com/hegic/Hegic-protocol-v8888

14. Report of the results (%)

Answer: 0%

No test report was found.

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

15. Formal Verification test done (%)

Answer: 0%

No formal verification was found.

16. Stress Testing environment (%)

Answer: 100%

Hegic is deployed to Ropsten testnet.

Security

18%

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

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

Answer: 20%

No audits have taken place on Hegic V8888. Older versions (V888) have been audited by PeckShield, but since V8888 is a different strapiuct this iteration remains unaudited.

Percentage Score 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
50%
Audit(s) performed after deployment and changes needed but not implemented
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, (where question 1 is 0%)
Deduct 25% if code is in a private repo and no note from auditors that audit is applicable to deployed code.

18. Is the bug bounty acceptable high? (%)

Answer: 0%

Hegic announced an intention to launch a bug bounty program, but no follow-up was found.

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
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.

Access Controls

0%

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. Can a user clearly and quickly find the status of the access controls (%)

Answer: 0%

There is no access control information. For older versions, admin information was found but this must be updated in V888 documentation in order to remain relevant.

Percentage Score 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%

No V8888 relevant information was found.

Percentage Score Guidance:
All the contracts are immutable -- 100% OR
a) All contracts are clearly labelled as upgradeable (or not) -- 30% AND
b) The type of ownership is clearly indicated (OnlyOwner / MultiSig / Defined Roles) -- 30% AND
c) 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%

No information was found.

Percentage Score 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 be found

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

Answer: 0%

No pause control documentation was found.

Percentage Score Guidance:
100%
All the contracts are immutable or no pause control needed and this is explained OR 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

Appendices

 The author of this review is Rex of DeFi Safety.

Email: rex@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.

1import "../Interfaces/Interfaces.sol";
2import "../Interfaces/IOptionsManager.sol";
34/**
5 * @author 0mllwntrmt3
6 * @title Hegic Protocol V8888 Facade Contract
7 * @notice The contract that calculates the options prices,
8 * conducts the process of buying options, converts the premiums
9 * into the token that the pool is denominated in and grants
10 * permissions to the contracts such as GSN (Gas Station Network).
11 **/
1213contract Facade is Ownable {
14    using SafeERC20 for IERC20;
1516    IWETH public immutable WETH;
17    IUniswapV2Router01 public immutable exchange;
18    IOptionsManager public immutable optionsManager;
19    address public _trustedForwarder;
2021    constructor(
22        IWETH weth,
23        IUniswapV2Router01 router,
24        IOptionsManager manager,
25        address trustedForwarder
26    ) {
27        WETH = weth;
28        exchange = router;
29        _trustedForwarder = trustedForwarder;
30        optionsManager = manager;
31    }
3233    /**
34     * @notice Used for calculating the option price (the premium) and using
35     * the swap router (if needed) to convert the tokens with which the user
36     * pays the premium into the token in which the pool is denominated.
37     * @param period The option period
38     * @param amount The option size
39     * @param strike The option strike
40     * @param total The total premium
41     * @param baseTotal The part of the premium that
42     * is distributed among the liquidity providers
43     * @param settlementFee The part of the premium that
44     * is distributed among the HEGIC staking participants
45     **/
46    function getOptionPrice(
47        IHegicPool pool,
48        uint256 period,
49        uint256 amount,
50        uint256 strike,
51        address[] calldata swappath
52    )
53        public
54        view
55        returns (
56            uint256 total,
57            uint256 baseTotal,
58            uint256 settlementFee,
59            uint256 premium
60        )
61    {
62        (uint256 _baseTotal, uint256 baseSettlementFee, uint256 basePremium) =
63            getBaseOptionCost(pool, period, amount, strike);
64        if (swappath.length > 1)
65            total = exchange.getAmountsIn(_baseTotal, swappath)[0];
66        else total = _baseTotal;
6768        baseTotal = _baseTotal;
69        settlementFee = (total * baseSettlementFee) / baseTotal;
70        premium = (total * basePremium) / baseTotal;
71    }
7273    /**
74     * @notice Used for calculating the option price (the premium)
75     * in the token in which the pool is denominated.
76     * @param period The option period
77     * @param amount The option size
78     * @param strike The option strike
79     **/
80    function getBaseOptionCost(
81        IHegicPool pool,
82        uint256 period,
83        uint256 amount,
84        uint256 strike
85    )
86        public
87        view
88        returns (
89            uint256 total,
90            uint256 settlementFee,
91            uint256 premium
92        )
93    {
94        (settlementFee, premium) = pool.calculateTotalPremium(
95            period,
96            amount,
97            strike
98        );
99        total = premium + settlementFee;
100    }
101102    /*
103     * @notice Used for approving the pools contracts addresses.
104     **/
105    function poolApprove(IHegicPool pool) external {
106        pool.token().safeApprove(address(pool), 0);
107        pool.token().safeApprove(address(pool), type(uint256).max);
108    }
109110    /*
111     * @notice Used for buying the option contract and converting
112     * the buyer's tokens (the total premium) into the token
113     * in which the pool is denominated.
114     * @param period The option period
115     * @param amount The option size
116     * @param strike The option strike
117     * @param acceptablePrice The highest acceptable price
118     **/
119    function createOption(
120        IHegicPool pool,
121        uint256 period,
122        uint256 amount,
123        uint256 strike,
124        address[] calldata swappath,
125        uint256 acceptablePrice
126    ) external {
127        address buyer = _msgSender();
128        (uint256 optionPrice, uint256 rawOptionPrice, , ) =
129            getOptionPrice(pool, period, amount, strike, swappath);
130        require(
131            optionPrice <= acceptablePrice,
132            "Facade Error: The option price is too high"
133        );
134        IERC20 paymentToken = IERC20(swappath[0]);
135        paymentToken.safeTransferFrom(buyer, address(this), optionPrice);
136        if (swappath.length > 1) {
137            if (
138                paymentToken.allowance(address(this), address(exchange)) <
139                optionPrice
140            ) {
141                paymentToken.safeApprove(address(exchange), 0);
142                paymentToken.safeApprove(address(exchange), type(uint256).max);
143            }
144145            exchange.swapTokensForExactTokens(
146                rawOptionPrice,
147                optionPrice,
148                swappath,
149                address(this),
150                block.timestamp
151            );
152        }
153        pool.sellOption(buyer, period, amount, strike);
154    }
155156    /**
157     * @notice Used for converting the liquidity provider's Ether (ETH)
158     * into Wrapped Ether (WETH) and providing the funds into the pool.
159     * @param hedged The liquidity tranche type: hedged or unhedged (classic)
160     **/
161    function provideEthToPool(
162        IHegicPool pool,
163        bool hedged,
164        uint256 minShare
165    ) external payable returns (uint256) {
166        WETH.deposit{value: msg.value}();
167        if (WETH.allowance(address(this), address(pool)) < msg.value)
168            WETH.approve(address(pool), type(uint256).max);
169        return pool.provideFrom(msg.sender, msg.value, hedged, minShare);
170    }
171172    /**
173     * @notice Unlocks the array of options.
174     * @param optionIDs The array of options
175     **/
176    function unlockAll(IHegicPool pool, uint256[] calldata optionIDs) external {
177        uint256 arrayLength = optionIDs.length;
178        for (uint256 i = 0; i < arrayLength; i++) {
179            pool.unlock(optionIDs[i]);
180        }
181    }
182183    /**
184     * @notice Used for granting the GSN (Gas Station Network) contract
185     * the permission to pay the gas (transaction) fees for the users.
186     * @param forwarder GSN (Gas Station Network) contract address
187     **/
188    function isTrustedForwarder(address forwarder) public view returns (bool) {
189        return forwarder == _trustedForwarder;
190    }

Solidity Contracts

Language
Files
Lines
Blanks
Comments
Code
Complexity
Solidity
8
1331
111
441
779
46

Comments to Code: 441 / 779 =  57 %

JavaScript Tests

Language
Files
Lines
Blanks
Comments
Code
Complexity
TypeScript
9
2666
157
1001
1508
8

Tests to Code: 1508 / 779 = 194 %