Balancer Contracts Audit

Balancer is an automated portfolio manager. It allows anyone to create Balancer pools, each of which implements an automated market maker (AMM) that is a generalization of the constant-product AMM popularized by Uniswap. Each pool can contain a collection of up to 8 ERC20 tokens, value-balanced according to user-defined weights. These pools can be used, for example, to create on-chain index funds without the use of price oracles. You can learn more about Balancer by reading their whitepaper. At the Balancer team’s request, we’ve audit their code and now publish our results.


We audited commit f4ed5d65362a8d6cec21662fb6eae233b0babc1f of the balancer-core repo. We audited all files in the /contracts/ directory with the exception of the Migration.sol file and any files in the /tests/ directory.

Trust Model


New Balancer pools can be created by anyone via the BFactory contract. Anytime liquidity is removed from a pool, an EXIT_FEE is charged and sent to the BFactory contract (at the time of writing the EXIT_FEE is 0, and so no exit fee is extracted when liquidity is removed from a pool). The BFactory contract has a privileged _blabs role that is capable of withdrawing any ERC20-compliant tokens held by the factory contract. This is how exit fees will be collected if/when the EXIT_FEE is changed. Other than the ability to withdraw fees from the BFactory contract, the _blabs role has no other power.

Neither the BFactory contract nor the BPool contracts that it instantiates are upgradable.

BPool Controllers

Each BPool contract has a _controller role which defaults to the address that initiated the creation of the pool.

Before a BPool is _finalized, the _controller is capable of trivially stealing most funds from the pool. This can be accomplished, for example, by binding a new token (which they fully control) to the pool, minting a large number of those tokens for themselves, then draining the remaining tokens from the pool by swapping them out for the newly-minted tokens. So for non-finalized pools, users must fully trust the _controller of the pool.

Additionally, even a _finalized pool can be manipulated (e.g.: DoS’d, drained of its value, etc) if any of its bound tokens have contracts that can be controlled by a third party. For example, a finalized pool that has bound the USDC token could be DoSed or drained of its value if Coinbase (who controls and can arbitrarily update the USDC contract) were malicious. For example, it could inflate USDC and use the new tokens to extract most of the remaining tokens from the pool, or it could put the BPool address on its “blacklist”, which would prevent any USDC from being transferred out of the pool.

So for both finalized and non-finalized pools, the user must fully trust the contracts of the tokens that have been bound to the pool.

Choice of tokens

As mentioned in the docs:

Bronze does not support ERC20 tokens that do not return bools for transfer and transferFrom.

This is because the _pullUnderlying and _pushUnderlying functions expect the underlying ERC20 tokens to return true on successful calls to their transfer and transferFrom functions. This makes sense because this behavior is required by the ERC20 specification.

It is important to note, however, that there exist tokens that are thought of as “ERC20 tokens” but do not actually follow the specification with regards to returning a bool on a successful call to transfer or transferFrom, and that such non-compliant behavior could result in those tokens being stuck in a BPool contract.

For example, the popular BNB token from Binance returns true on a successful transferFrom, but does not return true on a successful transfer. This means that BNB could be transferred into a BPool contract (because the _pullUnderlying function would succeed) but could not be transferred out of a BPool contract (because the _pushUnderlying function would revert on line 712).

This issue does not affect fully-compliant ERC20 tokens, and so is not technically a break from the specification. However, it may, in practice, result in loss of funds. The developers are aware of this issue and it is mentioned both in the “limitations” section of the docs and in their FAQ.

Furthermore, some popular tokens can extract a fee from the sender and/or the recipient on calls to transfer and transferFrom. For example, USDT is capable of extracting a fee from the recipient on calls to transfer and transferFrom (though no fee is being extracted at the time of writing). This non-standard behavior can result in serious accounting errors in the BPool contract that may result in loss of funds.

In particular, for any given token bound to the pool, the BPool contract tracks its token balance in a Record struct in the _records mapping. The balance of this Record gets updated (for example, here) before each call to the _pullUnderlying and _pushUnderlying functions. However, the code that updates the balance assumes that the amount sent and received is exactly equal to the amount parameter used when calling the transfer or transferFrom functions — that is, it assumes standard balance-updating behavior of the underlying token. So for non-standard tokens of this type, the BPool contract may actually hold more or fewer tokens than its corresponding Record would suggest. This error in accounting may be used to steal value from the pool.

To add support for these two types of non-compliant and non-standard tokens in future versions of Balancer, consider using OpenZeppelin’s SafeERC20 library to perform the underlying token transfers. This library handles the edge cases where otherwise-compliant tokens don’t return a bool on a call to transfer or transferFrom. Also consider using the “before and after balance check” pattern (see Compound’s doTransferIn function for an example) to handle the case where tokens do non-standard balance updating during a transfer or transferFrom. This pattern measures the amount of a given token that has been added or removed from the pool, as opposed to relying on the amount parameter of the transfer and transferFrom functions of the underlying tokens.

Alternatively, consider allowing users to make arbitrary deposits & withdraws from the BPool contract, then at the end of the function call, check if the token balances of the BPool contract are acceptable, and revert if not (see UniswapV2’s swap function for an example). This puts the burden of proper accounting on the user (or intermediary contract), while the BPool contract itself needs only verify that its own token balances are acceptable — without having to consider any possible non-standard balance-updating behavior of the underlying tokens.

General health

Overall we found the Balancer contract code to be clear and well-written. Its component parts can be easily analyzed and tested in isolation. The whitepaper and documentation were helpful and the repo includes extensive tests.

Findings and Recommendations

Here we report our findings and recommendations.

Critical severity


High severity


Medium severity


Low severity

Rounding errors are not always in favor of the pool

Fixed-point arithmetic introduces small errors in the computations used throughout the contracts. The BNum library makes use of fixed-point algorithms that minimize these errors (by rounding to the nearest smallest unit). However, these errors still exist and, importantly, are not always in favor of the pool. This means it may be possible for users to illegitimately remove dust amounts of from the pool. This can happen both when adding and removing liquidity and when performing swaps. Under extreme conditions it may be profitable to exploit these errors.

As an example, consider the joinPool function. Suppose the poolTotal is 100e18 and one of the bound tokens, t, has a record such that _records[t].balance = 20000005, which represents a token balance of 200.00005 for a token with 5 decimals. If the user supplies a poolAmountOut parameter value of 17857142860000000000 (approximately 17.86e18), then the ratio variable will be 178571428600000000. If there were no rounding errors, we would expect that the user would have to transfer in 35.71429464857143 units of the token. However, due to the rounding error introduced by bmul, the user actually transfers in 35.71429 tokens, which is 0.00000464857143 fewer tokens than expected. In other words, the user bought shares of the pool slightly more cheaply than intended. The error introduced by the fixed-point arithmetic, though small, was not in favor of the pool in this case.

Similar situations can arise when exiting the pool, and when interacting with the swapping functions. Computing the maximum error bounds for the swapping functions is more difficult (we did not explicitly compute them during this audit), but the same principles may apply, and the underlying issue is that the errors may not always favor the pool.

Under most normal conditions, these errors are negligible and not profitable to exploit. The cost of gas alone would typically make exploitation cost-prohibitive, and the error must be great enough (and in favor of the attacker) to outweigh any swap fees or exit fees incurred.

In some very extreme cases, however, exploiting these errors may be profitable. For example, if an attacker can illegitimately remove an extra 0.000004 tokens from the pool, and those tokens are worth $1M each, then the attacker could gross $4 per transaction. If it cost less in gas to perform the attack (including the gas cost of flash-borrowing the required capital if necessary) then you could expect attackers to create bots to exploit the rounding errors until the pool was emptied.

All else being equal, these errors become more severe when the tokens in question have fewer decimals, and when the value of the whole units of the token are greater.

Consider refactoring the code to ensure that all arithmetic errors related to moving tokens are in favor of the pool.

For example, in the joinPool function, consider adding 1 to the output of bdiv on line 358 to counteract any rounding-down that may have ocurred during the execution of bdiv, and consider adding 1 to the output of bmul on line 381 to counteract any rounding-down that may have ocurred during the execution of bmul. This would ensure that all calls to the joinPool function have arithmetic errors that are in favor of the pool. While this may slightly increase the absolute size of the errors, it enforces that the direction of the errors favors the security of the pool.

With all arithmetic errors in favor of the pool, there would be no need to worry about attackers splitting/batching transactions in an attempt to exploit arithmetic errors in their favor, even under extreme conditions.

Notes & Additional Information

Missing content and broken links in the documents

There are a few broken links and some missing content in the official docs. For example under the API section, the getCurrentTokens()->[Ts] and getFinalTokens->[Ts] links both point to the getNumTokens section of the docs, and the content for those functions is missing from the page.

Consider double checking the docs for missing content and broken links.

Possible gas improvements

In their whitepaper, Balancer mentions that the Silver release will focus, in part, on gas improvements. Looking for gas improvement opportunities was not in-scope for this audit. However, we noticed a couple of these opportunities in passing and mention them here for convenience. This is not a complete or thorough list of gas improvement opportunities.

  • There are instances where memoization could improve gas performance. For example, the increaseApproval function could memoize the _allowance[msg.sender][dst] variable to improve gas performance. E.g.:
    function increaseApproval(address dst, uint amt) external returns (bool) {
        uint oldAllowance = _allowance[msg.sender][dst];
        _allowance[msg.sender][dst] = badd(oldAllowance, amt);
        emit Approval(msg.sender, dst, oldAllowance);
        return true;
  • The require statements on lines 51 and 58 of BToken.sol are not necessary because the bsub on the next lines will revert if there is an underflow. Removing these require statement improves gas performance for non-reverting calls to _burn and _move, but reduces gas performance for calls that would underflow. Since the former is likely to be much more common than the latter, this could be a net positive for gas performance.

  • In some places, pool shares are minted to the BPool contract and then pushed out to a user. It may be more efficient to mint the shares directly into the user’s account. This would require refactoring the mint function.

Incorrect code comments in BMath.sol

The functions in the BMath contract are correct implementations of the functions described in the whitepaper and the code comments for the various functions in BMath.sol are correct, with the following exceptions.

  • The tO variable in the comments of the calcPoolInGivenSingleOut function should be a wO.

  • The wO variable (which represents the tokenWeightOut) is not defined in the comments of the calcSingleOutGivenPoolIn function.

  • The wI variable is defined in the comments of the calcSingleOutGivenPoolIn function even though it is not used in the function.

  • There is a b0 in the comments of the calcSingleOutGivenPoolIn that should be a bO (that is, it should be the letter “oh” instead of the number zero).

These errors affect only the code comments and are not present in the code itself. Consider correcting these errors to prevent any confusion they may cause readers of the code.

Additionally, the code describing the calcSingleInGivenPoolOut function does not match the code itself. The numerator is stored in the tokenAmountInAfterFee variable and the denominator is stored in the zar variable. So for the code to match the description in the comments and the docs, the return value should be bdiv(tokenAmountInAfterFee, zar). But the actual return value is bdiv(tokenAmountInAfterFee, bsub(BONE, zar)). Some internal code comments explain the discrepancy and suggest that the actual behavior of the code is the intended behavior.

Consider adjusting both the code comments and the docs for the calcSingleInGivenPoolOut function to make them consistent with the actual behavior of the code for this function.

Lack of code comments in BNum library

While the intended behaviors of the functions in BNum.sol are clear, the contract could benefit from NatSpec comments to all of the functions, specifically identifying which uint parameters are meant to be interpreted as integers, and which are meant to be interpreted as integer representations of fixed-precision numbers.

Use of named return values

There is an inconsistent use of named return variables. For example, every function in BMath.sol has named return variables. None of the functions in BNum.sol have named return variables. Some functions in BPool.sol have named return variable, while others don’t.

Consider removing named return variables from all functions wherever possible. This can help reduce the chances of introducing regressions when refactoring the code in the future.

Possible improvements to the BNum library

The bpowApprox function computes base^exp using a binomial approximation (specifically, using a Taylor Series approximation about the point zero). This approximation technique is accurate only if the absolute value of x (on line 134) is less than BONE. An equivalent condition is 0 < base < 2 * BONE.

This bpowApprox function is currently called only via the bpow function, which ensures that 0 < base < 2 * BONE, so currently, all calls to the bpowApprox function have their inputs checked to ensure the function is used only with valid inputs.

However, there may be some room for improvement here.

Consider removing the two require statements from the bpow function (because they aren’t strictly needed unless exp is not a whole number) and instead putting a require(x < BONE) statement after line 134 of bpowApprox. Additionally, if the bpowApprox function is intended to be used only for values of exp less than BONE, consider adding a require(exp < BONE) statement to the beginning of the bpowApprox function.

This would allow the bpowApprox function to be used safely, all on its own, independent of how it used by the bpow function. That is, it would ensure that the necessary limitations for the binomial approximation are always enforced by the bpowApprox function itself, instead of relying on developers to remember to perform those checks on their own before calling the bpowApprox function. It would also remove unnecessary limitations on the bpow function when using it with whole-number exponents.

In general, this would make the BNum library more flexible and less prone to error during future code refactors.

Use of aliases

To favor explicitness, consider declaring all instances of unsigned integers using uint256 instead of the alias uint.