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Venus Prime Audit


Table of Contents


From 2023-08-21
To 2023-09-13
Total Issues
14 (12 resolved)
Critical Severity Issues
1 (1 resolved)
High Severity Issues
0 (0 resolved)
Medium Severity Issues
2 (2 resolved)
Low Severity Issues
5 (4 resolved)
Notes & Additional Information
6 (5 resolved)


We audited the VenusProtocol/venus-protocol repository at commit f31a054. More specifically, we audited pull request #196.

├── Comptroller
│   ├── ComptrollerStorage.sol
│   └── Diamond
│       └── facets
│           ├── PolicyFacet.sol
│           └── SetterFacet.sol
├── Tokens
│   ├── Prime
│      ├── IPrime.sol
│      ├── Prime.sol
│      ├── PrimeStorage.sol
│      └── libs
│ ├── Scores.sol
│          ├── FixedMath.sol
│         └── FixedMath0x.sol

└── XVSVault
   ├── XVSVault.sol
└── XVSVaultStorage.sol

System Overview

Prime is a reward distribution smart contract system, tailored specifically to reward its holders (often referred to as "Prime holders"). The distribution of rewards is contingent upon a calculated score derived from an individual's staking activity and their associated balance in the Venus lending protocol.

Prime Token Qualification
In order to qualify for the Prime token and consequently partake in its reward system, a user must fulfill the criterion of staking no fewer than 1,000 XVS. This stake should be maintained for a minimum duration of 90 days.

Reward Distribution
All incoming revenue to the Prime system is distributed amongst Prime holders. This distribution is proportional, based on the calculated scores of each individual holder.

Score Calculation
The scoring function of the Prime system is expressed as:

xvs^𝝰 * capital^(1-𝝰)

       • "xvs" represents the amount of XVS staked by the user.
       • "capital" is the summation of the user's borrowed balance in the Venus lending protocol
           and their vToken balance up to a certain cap.
       • "𝝰" adjusts the weight of XVS compared to "capital" for score calculation purposes.

Interactions With External Systems
Prime closely interacts with the Venus lending protocol. The borrowed balance from Venus, as well as the vToken balance, play crucial roles in determining an individual's score, and thereby their reward from the Prime system.

XVSVault and the Comptroller's PolicyFacet were modified by adding hooks to alert rime on balance changes of staked XVS and vToken , respectively.

Adjustable Parameters

The Prime system has the ability to modify the alpha , rewardMultiplier, and borrowMultiplier parameters after deployment. The rewardMultiplier and borrowMultiplier set a cap for the amount of VTokens and borrowed balance respectively, at which point rewards stop increasing relative to the amount borrowed or loaned.

Security Model and Trust Assumptions

We trust the Protocol Share Reserve (PSR) to handle all accounting functionalities correctly. The system also interacts with the broader lending protocol by reading user’s vToken and borrowed balances which are used to compute scores.

Privileged Roles

Minimal modifications were made to the access control manager system. This system has been nearly unmodified. Therefore, the assumptions are nearly identical to those listed in the published Venus Protocol Oracles report. The prime.sol contract has an owner address that can set the access controller address. This controller can then set permissions for the following privileged functions:

       • Update the alpha parameter used in the score formula
       • Update the multipliers used in the score formula
       • Add new markets to the Prime program
       • Set the maximum number of Prime tokens that can be minted
       • Issue Prime tokens directly without staking requirements

Critical Severity

updateAlpha and updateMultipliersBreak Rewards Accounting and Could Make Rewards Pool Insolvent

Every time interest is accrued, the total rewards are divided by the total sum of the user's scores to get the rewards entitled per score. This assumes that the total score for each user is the same when interest is collected as when it is calculated. This invariant is usually maintained as executeBoost collects the interest from users before any actions that change their XVS or VToken balances (which play a role in score calculation).

However, updateAlpha and updateMultipliers update the total interest for every market but do not first collect the interest for every individual user. This means that when users collect interest after the alpha or multiplier update, the new score is multiplied by the interest accrued since the last time executeBoost was called. However, that score is different from the score used to calculate the interest at the time. Additionally, the sumOfScores now does not equal the sumOfScores during interest calculation.

If the update increases the sum total of the user's scores, there would not be enough funds in the reserve to pay out all the accounted-for reward amounts. This would mean that users who collect interest early on will get a larger reward than they should, while later claimants will have zero rewards as the reward pool will become insolvent.

Update: Resolved in pull request #196 at commit f5e3221.The Venus team stated:

With this change, we'll always accrue interest before updating the user score, so the rewards will be allocated using the right score

Medium Severity

Maximum XVS Staked Does Not Match the Documentation

The documentation states:

The maximum XVS cap taken into account when calculating the score of a user is 100,000 XVS.

However the constant MAXIMUM_XVS_CAP is set to 10000. Consider modifying the variable or updating the documentation accordingly.

Update: Resolved in pull request #196 at commit 860c959.

Irrevocable Token Cannot Be Minted to Revocable Token Holder

If the Venus team attempts to mint an irrevocable token for a user already holding a revocable Prime token, the minting process fails. This is due to the internal function _mint, which requires that the recipient must not hold any form of Prime token, whether it is revocable or irrevocable.

Given that irrevocable Prime tokens are more desirable as they remain even when the user unstakes, this behavior suggests an unintended restriction in the minting process.

Update: Resolved at commit a19e29c, pull request #196 at commit b98dc82.

Low Severity

Missing Check for Setting Alpha Values

alphaDenominator should never exceed alphaNumerator, as specified by the audit documentation as well as this error which would be thrown in the calculateScore function:

assert(alphaNumerator <= alphaDenominator);

Consider ensuring that alphaNumerator <= alphaDenominator in the initialize and updateAlpha functions.

Update: Resolved at commit f7d463b, at commit a7e913f, at commit 5a04aa0.

Missing Docstrings

Throughout the codebase, there are several parts that do not have docstrings:

       • Line 572 in Prime.sol
       • Line 105 in Prime.sol

Consider thoroughly documenting all functions (and their parameters) that are part of any contract's public API. Functions implementing sensitive functionality, even if not public, should be clearly documented as well. When writing docstrings, consider following the Ethereum Natural Specification Format (NatSpec).

Update: Resolved at commit eb36a3f, at commit 91b2474, at commit 2825c16, at commit 2abb751.

Unsafe Typecasting in uintMul() and uintDiv()

The divisor argument of uintDiv and the multiplier argument of uintMul in the FixedMath library are both signed integers.

The results of multiplication and division operations involving these arguments will therefore be signed, and the results of both the uintDiv and uintMul functions are downcast to uint256.

While this may produce the correct results when the multiplier and divisor arguments are properly-encoded fixed-point numbers, it will produce erroneous results when the high bit of either of these arguments is set.

Consider adding a check to ensure that the multiplier argument of uintMul and the divisor argument of uintDiv are well-formed fixed-point numbers.

Update: Resolved at commit 61ad1e7.

Old Floating Pragma Version

Pragma directives should be fixed to clearly identify the Solidity version with which the contracts will be compiled.

The file IPrime.sol has the solidity ^0.5.16 floating pragma directive which is an outdated Solidity version.

Consider using the same fixed pragma version used in Prime.sol.

Update: Acknowledged, not resolved. The Venus team stated:

It is done so that our core pool contracts can import the interface. 

Missing Check that PrimePoolId Is a Valid poolId

A valid poolId for a token must be less than the length of the poolInfos array for a particular rewardToken . A prime poolId should also match a pre-existing poolId, so this condition should also be true for Prime pools. However, the setPrimeToken function does not have this check.

Consider adding a check in setPrimeToken to ensure that it matches a pre-existing poolId.

Update: Resolved at commit ad5b11a.

Notes & Additional Information

Non-Explicit Imports Are Used

The use of non-explicit imports in the codebase can decrease the clarity of the code, and may create naming conflicts between locally defined and imported variables. This is particularly relevant when multiple contracts exist within the same Solidity files or when inheritance chains are long.

Throughout the codebase, global imports are used:

       • Line 3 of Prime.sol
       • Line 4 of Prime.sol
       • Line 5 of Prime.sol
       • Line 6 of Prime.sol
       • Line 6 of FixedMath.sol
       • Line 7 of FixedMath.sol
       • Line 5 of Scores.sol
       • Line 6 of Scores.sol
       • Line 9 of XVSVault.sol

Following the principle that clearer code is better code, consider using named import syntax ( import {A, B, C} from "X" ) to explicitly declare which contracts are being imported.

Update: Resolved at commit b2fa6d5, and commit adb8535.

Using int/uint Instead of int256/uint256

Throughout the codebase, there are multiple instances where int/uint is used as opposed to int256/uint256:

Line 9 of Prime.sol
Line 10 of Prime.sol
Line 11 of Prime.sol
Line 118 of Prime.sol
Line 185 of Prime.sol
Line 190 of Prime.sol
Line 208 of Prime.sol
Line 223 of Prime.sol
Line 249 of Prime.sol

In favor of explicitness, consider replacing all instances of int/uint with int256/ uint256.

Update: Resolved at commit e9269c7.

Unused State Variable

The MAXIMUM_BPS state variable in the PrimeStorageV1 contract is never used.

To improve the overall clarity, intentionality, and readability of the codebase, consider removing any unused state variables.

Update: Resolved. The Venus team stated:

We are finally using it in the function _calculateUserAPR. See commit ec2f4fd.

Lack of SPDX License Identifiers

Throughout the codebase, there are files that lack SPDX license identifiers. For instance:

       • IPrime.sol
       • Prime.sol
       • PrimeStorage.sol

To avoid legal issues regarding copyright and follow best practices, consider adding SPDX license identifiers to files as suggested by the Solidity documentation.

Update: Resolved at commit f0b12eb.

Lack of Security Contact

Providing a specific security contact, such as an email or ENS, within a smart contract significantly simplifies the process for individuals to communicate if they identify a vulnerability in the code. This practice proves beneficial as it permits the code owners to dictate the communication channel for vulnerability disclosure, eliminating the risk of miscommunication or failure to report due to a lack of knowledge on how to do so. Additionally, if the contract incorporates third-party libraries and a bug surfaces in these, it becomes easier for the creators of those libraries to make contact, inform the code owners about the problem, and provide mitigation instructions.

Neither of the contracts in scope has a security contact.

Consider adding a NatSpec comment on top of the contracts' definitions with a security contact. Using the @custom:security-contact convention is recommended as it has been adopted by the OpenZeppelin Wizard and the ethereum-lists.

Update: Resolved at commit 405f962. The Venus team stated:

We have added a link to our github repo. At the end of the readme file in that repo we say this: For any concerns with the protocol, open an issue or visit us on Telegram to discuss. For security concerns, please contact the administrators of our telegram chat.

Multiple Instances of Missing Named Parameters in Mappings

Since Solidity 0.8.18, developers can utilize named parameters in mappings. This means mappings can take the form of mapping(KeyType KeyName? => ValueType ValueName?). This updated syntax provides a more transparent representation of the mapping's purpose.

Throughout the codebase, there are multiple mappings without named parameters:

• The tokens state variable in the PrimeStorageV1 contract.
• The
stakedAt state variable in the PrimeStorageV1 contract.
• The
markets state variable in the PrimeStorageV1 contract.
• The
interests state variable in the PrimeStorageV1 contract.
• The
isScoreUpdated state variable in the PrimeStorageV1 contract.
• The
vTokenForAsset state variable in the PrimeStorageV1 contract.
• The
unreleasedIncome state variable in the PrimeStorageV1 contract.

Consider adding named parameters to the mappings to improve the readability and maintainability of the code.

Update: Acknowledged, not resolved. The Venus team stated:

We are using solidity 0.8.13, and named parameters were included in 0.8.18


The addition of Prime tokens had a relatively low impact on the existing codebase. The audit uncovered 1 critical-severity and 2 medium-severity issues. Several recommendations were proposed to follow best practices.