Aave Safety Module

1 Executive Summary

This report presents the results of our engagement with Aave to review the Aave incentives smart contracts. The review was conducted over one week, from September 7th to September 11th by Sergii Kravchenko and Bernhard Mueller. A total of 10 person-days were spent.

2 Scope

Our review focused on the commit hash b125e181762a0318ce7dc1c9eed1b75d0520e343. The list of files in scope can be found in the Appendix.

The hash of the final commit with all fixes merged was a058e0e4443b775f403ee49062e304e7d857e07e.

2.1 Objectives

Together with the Aave team, we identified the following priorities for our review:

1. Ensure that the system is implemented consistently with the intended functionality, and without unintended edge cases.
2. Identify known vulnerabilities particular to smart contract systems, as outlined in our Smart Contract Best Practices, and the Smart Contract Weakness Classification Registry.
3. Identify ways of gaming or abusing the system, e.g. to drain funds from the rewards contract.

We specifically focused on identifying possible ways of gaming the staking, rewards distribution and cooldown mechanisms, e.g.:

• Ways of claiming rewards without any time passing between stake and unstake;
• Incorrect updates of internal accounting (e.g. user can claim the same reward twice by transferring stakedTokens, etc.)l
• Abusing or bypassing the cooldown.

3 Results Overview

We did not identify any critical issues that would have allowed to game the system.

It was noted that the cooldown mechanism for unstaking can be manipulated to a certain degree: A user could shorten the coolodown by splitting their stake into chunks and starting the cooldown at different points in time. However, while the mechanism isn’t perfect, it still achieves its goal of preventing users from unstaking if they anticipate being slashed. The effect of the mechanism can be improved by choosing appropriate values for the cooldowbn and unstaking window (see “issues” section).

Besides the above, only minor code quality issues and best practive violations were found.

3.1 Recommendations

Review the issues and code quality recommendations documented in this report.

4 Issues

Each issue has an assigned severity:

• Minor issues are subjective in nature. They are typically suggestions around best practices or readability. Code maintainers should use their own judgment as to whether to address such issues.
• Medium issues are objective in nature but are not security vulnerabilities. These should be addressed unless there is a clear reason not to.
• Major issues are security vulnerabilities that may not be directly exploitable or may require certain conditions in order to be exploited. All major issues should be addressed.
• Critical issues are directly exploitable security vulnerabilities that need to be fixed.

IERC20(STAKED_TOKEN).transferFrom(msg.sender, address(this), amount);

REWARD_TOKEN.transferFrom(REWARDS_VAULT, to, amountToWithdraw);

IERC20(STAKED_TOKEN).transfer(to, amount);

function configureAssets(DistributionTypes.AssetConfigInput[] calldata assetsConfigInput)
  external
//    override TODO: create interface

 * @dev Stakes tokens to start earning rewards
 * @param to Address to stake for
 * @param amount Amount to stake
 **/
function claimRewards(address to, uint256 amount) external override {

/**
 * @dev Claims reward for an user, on all the assets of the lending pool, accumulating the pending rewards
 * @param amount Amount of rewards to claim
 * @param to Address that will be receiving the rewards
 * @return Rewards claimed
 **/
function claimRewards(
  uint256 amount,
  address to,
  bool stake
) external override returns (uint256) {

Appendix 1 - Files in Scope

This audit covered the following files:

Appendix 2 - Artifacts

This section contains some of the artifacts generated during our review by automated tools, the test suite, etc. If any issues or recommendations were identified by the output presented here, they have been addressed in the appropriate section above.

A.2.1 Surya

Surya is a utility tool for smart contract systems. It provides a number of visual outputs and information about the structure of smart contracts. It also supports querying the function call graph in multiple ways to aid in the manual inspection and control flow analysis of contracts.

Below is a complete list of functions with their visibility and modifiers:

A.2.3 Tests Suite

Below is the output generated by running the test suite:

 AaveIncentivesController claimRewards tests
    ✓ Accrued rewards are 0, claim 0 (181ms)
    ✓ Accrued rewards are 0, claim not 0 (148ms)
    ✓ Accrued rewards are not 0 (156ms)
    ✓ Should allow -1 (160ms)
    ✓ Should add extra premium on withdrawal to stake (179ms)
    ✓ Should withdraw everything if amountToClaim more then rewards balance (141ms)
    ✓ Should withdraw to another user (116ms)
    ✓ Should withdraw to another user and stake (144ms)

  AaveIncentivesController configureAssets
    ✓ Tries to submit config updates not from emission manager
    ✓ Submit initial config for the assets (41ms)
    ✓ Submit updated config for the assets (57ms)
    ✓ Indexes should change if emission are set not to 0, and pool has deposited and borrowed funds (64ms)
    ✓ Indexes should cumulate rewards if next emission is 0 (43ms)
    ✓ Indexes should not change if no emission (39ms)
    ✓ Should go to the limit if distribution ended (40ms)
    ✓ Should not accrue any rewards after end or distribution (41ms)

  AaveIncentivesController constructor tests
    ✓ should assign correct params (127ms)

  AaveIncentivesController getRewardsBalance tests
    ✓ Accrued rewards are 0 (138ms)
    ✓ Accrued rewards are not 0 (110ms)
    ✓ Accrued rewards are not 0 (102ms)

  AaveIncentivesController handleAction tests
    ✓ should revert if it's not lending pool
    ✓ All 0 (75ms)
    ✓ Accrued rewards are 0, 0 emission (65ms)
    ✓ Accrued rewards are 0, 0 user balance (68ms)
    ✓ 1. Accrued rewards are not 0 (59ms)
    ✓ 2. Accrued rewards are not 0 (73ms)

  AaveIncentivesController initialize
    ✓ Tries to call initialize second time, should be reverted
    ✓ allowance on aave token should be granted to psm contract for pei

  StakedAave. Basics
    ✓ Initial configuration after initialize() is correct (47ms)
    ✓ Reverts trying to stake 0 amount
    ✓ User 1 stakes 50 AAVE: receives 50 SAAVE, StakedAave balance of AAVE is 50 and his rewards to claim are 0 (103ms)
    ✓ User 1 stakes 20 AAVE more: his total SAAVE balance increases, StakedAave balance of Aave increases and his reward until now get accumulated (94ms)
    ✓ User 1 claim half rewards
    ✓ User 1 tries to claim higher reward than current rewards balance
    ✓ User 1 claim all rewards (46ms)
    ✓ User 6 stakes 50 AAVE, with the rewards not enabled (86ms)
    ✓ User 6 stakes 30 AAVE more, with the rewards not enabled (80ms)
    ✓ Validates staker cooldown with stake() while being on valid unstake window (131ms)

  StakedAave. Redeem
    ✓ Reverts trying to redeem 0 amount
    ✓ User 1 stakes 50 AAVE
    ✓ User 1 tries to redeem without activating the cooldown first
    ✓ User 1 activates the cooldown, but is not able to redeem before the COOLDOWN_SECONDS passed (47ms)
    ✓ User 1 activates the cooldown again, and tries to redeem a bigger amount that he has staked
    ✓ User 1 activates the cooldown again, and redeems within the unstake period (59ms)
    ✓ User 4 stakes 50 AAVE, activates the cooldown and redeems half of the amount (84ms)
    ✓ User 5 stakes 50 AAVE, activates the cooldown and redeems with rewards not enabled (88ms)

  StakedAave. Transfers
    ✓ User 1 stakes 50 AAVE (96ms)
    ✓ User 1 transfers 50 SAAVE to User 5 (183ms)
    ✓ User 5 transfers 50 SAAVE to himself (148ms)
    ✓ User 5 transfers 50 SAAVE to user 2, with rewards not enabled (213ms)
    ✓ User 4 stakes and transfers 50 SAAVE to user 2, with rewards not enabled (223ms)
    ✓ Activate cooldown of User2, transfer entire amount from User2 to User3, cooldown of User2 should be reset (157ms)
    ✓ Transfer balance from User 3 to user 2 cooldown  of User 2 should be reset if User3 cooldown expired (170ms)
    ✓ Transfer balance from User 3 to user 2, cooldown of User 2 should be the same if User3 cooldown is less than User2 cooldown (155ms)


  54 passing (7s)

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