ZKsync L2 Governance Audit

OpenZeppelin Security | October 23, 2024

Table of Contents

Summary

Type
Governance
Timeline
From 2024-05-13
To 2024-05-21
Languages
Solidity
Total Issues
9 (4 resolved)
Critical Severity Issues
0 (0 resolved)
High Severity Issues
0 (0 resolved)
Medium Severity Issues
0 (0 resolved)
Low Severity Issues
4 (2 resolved)
Notes & Additional Information
5 (2 resolved)

Scope

We audited the ZKsync-Association/zk-governance repository at commit 2479575. All the resolutions mentioned in this report are contained at commit 29f0d0e.

In scope were the following files:

 src
├── ZkGovOpsGovernor.sol
├── ZkProtocolGovernor.sol
├── ZkTokenGovernor.sol
├── extensions
│   ├── GovernorGuardianVeto.sol
│   └── GovernorSettableFixedQuorum.sol
└── lib
    └── GovernorCountingFractional.sol
​

System Overview

This audit covers a new L2 governance system intended to be deployed on the zkSync Era chain to govern several different aspects of the ecosystem. The scope mainly consists of three separate top-level governor contracts, namely ZkProtocolGovernor, ZkTokenGovernor, and ZkGovOpsGovernor. All three governors are built on top of the OpenZeppelin Governor module, utilizing pre-built extensions such as GovernorSettings, GovernorVotes, GovernorTimelockControl, and GovernorPreventLateQuorum.

In addition, the governors use a fractional vote counting mechanism via the custom GovernorCountingFractional extension, allowing voters to split their vote weight among "Against"/"For"/"Abstain". There is an additional custom extension called GovernorSettableFixedQuorum which allows the resetting of quorum via governance proposals. All governors are connected to a standard TimelockController as the executor. Special proposer and canceller roles are introduced for some governors. These will be discussed in detail below.

ZkProtocolGovernor Contract

This governor is intended to manage proposals related to protocol upgrades. Anyone with enough voting weight in the integrated token can propose a new proposal. A proposal can be canceled by the proposer before voting starts.

ZkTokenGovernor Contract

This governor is intended to manage proposals related to the ZK token used for voting. It has a custom proposing and canceling mechanism:

  • Creating a proposal in this governor is guarded. However, an immutable PROPOSE_GUARDIAN can propose with 0 threshold at any time. When the proposal guard is turned off, the usual proposing mechanism with the preset proposalThreshold can be restored. This flag can be toggled on and off only via a governance proposal.
  • Cancellation of a proposal can only be triggered by an immutable VETO_GUARDIAN address during either the active or pending state.

ZkGovOpsGovernor Contract

This governor is intended to manage proposals that are not covered by either ZkProtocolGovernor or ZkTokenGovernor. This governor has the usual proposing flow with a custom cancellation flow similar to that of ZkTokenGovernor, that is, canceling a proposal can only be triggered by an immutable VETO_GUARDIAN address during either the active or pending state.

Security Model and Trust Assumptions

Privileged Roles

Voters

Each governor allows proposals to change its own governor settings. These are the onlyGovernance functions that can be executed via a successful governance proposal. In addition, all governors allow proposals with arbitrary data on arbitrary targets without any restriction. Thus, it is assumed that voters of each governor, as well as VETO_GUARDIAN, carry the responsibility for the validation of each call for each governor based on up-to-date on-chain conditions.

PROPOSE_GUARDIAN and VETO_GUARDIAN

The PROPOSE_GUARDIAN can propose in the ZkTokenGovernor with 0 threshold at any time and the VETO_GUARDIAN can cancel a proposal during either the active or pending state.

TimelockController as Executor

All governor contracts intend to integrate with a separate standard TimelockController to be the _executor. This allows the privileged roles in their respective TimelockController to influence the governance process via the timelock. For instance:

  • The PROPOSAL_ROLE can schedule any proposal.
  • The CANCELLER_ROLE can cancel any proposal, even successful proposals.
  • The EXECUTOR_ROLE, if assigned to a non-zero account, can execute any proposal in a ready state.
  • The TIMELOCK_ADMIN_ROLE can grant or revoke any of the above roles if assigned to a non-zero account.

If self-administrating, additional accounts can be assigned to these roles upon successful proposals via the governance process. We assume that the accounts in charge of the above roles and actions always act in the intended way. Hence, any attacks or vulnerabilities targeting this part of the system were not considered throughout this audit.

Low Severity

castVoteWithReasonAndParamsBySig Is Incompatible With ERC-4337

ERC-4337 is a standard that allows smart contracts to behave like user accounts. Under this ERC, there will be ERC-4337-compliant smart contract accounts in addition to Externally Owned Accounts (EOAs). To verify the signature when casting a vote with reason and parameters, the GovernorCountingFractional.sol contract uses the OpenZeppelin ECDSA library. However, this library makes a call to the ecrecover precompile contract which is incompatible with smart contract accounts.

Hence, to enable ERC-1271 smart contract account signature checks, consider using the SignatureChecker library instead.

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

An ERC-4337 wallet can use the non-signature methods to vote.

Inconsistent Counting Mode

In GovernorCountingFractional, the COUNTING_MODE returns a string that specifies the key-value pair quorum=for,abstain. This suggests that both For and Abstain votes should be counted towards quorum. However, when counting votes to decide whether quorum is reached, only the forVotes are counted. An inconsistency between the results interpretation of the COUNTING_MODE and the _quorumReached functions could potentially lead to an incorrect UI representation that causes confusion about the proposal state.

Consider updating the counting mode to be consistent with the actual counting method.

Update: Resolved at commit a694730.

Inconsistent Use of msg.sender and _msgSender()

A contract may use the _msgSender() function in certain cases where it allows meta transactions by overriding the method to extract the original message sender. Consistent use of _msgSender()/msg.sender within a contract is important to avoid any unintended consequence for executing meta transactions.

In the following instances, both msg.sender and _msgSender() are used in the same contract:

Consider manually checking for the consistent usage of msg.sender, ensuring that any inconsistency is intentional and heavily documented.

Update: Resolved at commit 6afb121.

Possible Duplicate Event Emission

When a setter function does not check if the value has changed, it opens up the possibility of spamming events signalling that the value has changed whereas it has not. Spamming the same values can potentially confuse off-chain clients.

Within ZkTokenGovernor.sol, the _setIsProposeGuarded sets isProposeGuarded and emits an event without checking whether the value has changed or not.

Although such event emission can only be triggered via a successful governance proposal, consider adding a check to emit an event only when the updated value differs from the current state.

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

We are not implementing this fix. It is unlikely governance will pass a proposal with the same values and if they do it is not clear that clients or integrators should not be made aware.

Notes & Additional Information

Lack of Security Contact

Providing a specific security contact (such as an email or ENS name) within a smart contract significantly simplifies the process for individuals to communicate if they identify a vulnerability in the code. This practice is quite 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. In addition, if the contract incorporates third-party libraries and a bug surfaces in those, it becomes easier for their maintainers to contact the appropriate person about the problem and provide mitigation instructions.

Throughout the codebase, there are contracts that do not have a security contact:

Consider adding a NatSpec comment containing a security contact above each contract definition. 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 89af3fe and commit a8f1974.

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 a mapping's purpose.

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

Consider adding named parameters to mappings in order to improve the readability and maintainability of the codebase.

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

This Note is related to the GovernorCountingFractional.sol contract, which was audited in the past. As such, we do not wish to modify or update this codebase.

Use Custom Errors

Since Solidity version 0.8.4, custom errors provide a cleaner and more cost-efficient way to explain to users why an operation failed.

Multiple instances of revert and/or require statements were found within GovernorCountingFractional.sol:

  • The require statement with the message "GovernorCountingFractional: no weight"
  • The revert statement with the message "GovernorCountingFractional: all weight cast"
  • The require statement with the message "GovernorCountingFractional: vote would exceed weight"
  • The revert statement with the message "GovernorCountingFractional: invalid support value, must be included in VoteType enum"
  • The require statement with the message "GovernorCountingFractional: invalid voteData"
  • The require statement with the message "GovernorCountingFractional: vote would exceed weight"
  • The require statement with the message "GovernorCountingFractional: invalid params for signature-based vote"
  • The require statement with the message "GovernorCountingFractional: signature has already been used"

For conciseness and gas savings, consider replacing require and revert statements with custom errors.

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

This Note is related to the GovernorCountingFractional.sol contract, which was audited in the past. As such, we do not wish to modify or update this codebase.

Unused Named Return Variables

Named return variables are a way to declare variables that are meant to be used within a function's body for the purpose of being returned as that function's output. They are an alternative to explicit in-line return statements.

Within GovernorCountingFractional.sol, there are unused named return variables:

Consider either using or removing any unused named return variables.

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

This Note is related to the GovernorCountingFractional.sol contract, which was audited in the past. As such, we do not wish to modify or update this codebase.

Insufficient Documentation

Most of the codebase is very well-documented. However, the following aspect could benefit from clearer documentation.

There are three top-level governor contracts, namely ZkProtocolGovernor.sol, ZkTokenGovernor.sol, and ZkGovOpsGovernor.sol, which are dedicated to processing non-overlapping categories of proposals. However, there is a lack of clear instructions or example proposals to inform proposers about which governor should one send a particular proposal to. In the current setup, if a proposal is sent to the wrong governor, it is through the voting or the cancelling process that the proposal can be stopped. As such, more instructive documentation could help minimize unnecessary voting and cancelling.

Consider expanding and improving the documentation pertaining to sending proposals to governors.

Update: Resolved at commits 6d62af4, 021e028, e1003cf1 and 4537681.

Conclusion

The L2 governance contracts provide ways to manage proposals that affect various aspects of the zkSync Era ecosystem, such as protocol upgrades, token minting and allocation, and other governance activities. This decentralized governance system lays down the infrastructure required to engage the community in protocol governance.

The audit yielded four low-severity issues along with a few recommendations for code improvement. The ScopeLift team, who developed the codebase, provided a detailed specification of the system. We also appreciate ScopeLift's team's valuable input in addressing our questions throughout this engagement.

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