DRAM stablecoin

1 Executive Summary

This report presents the results of our engagement with DRAM to review their stable coin called Dram.

The review was conducted over two weeks, from August 14, 2023 to August 18, 2023, by Chingiz Mardanov. A total of 5 person-days were spent.

2 Scope

Our review focused on the commit hash 291600c50c295b3bc473c975d504bc5671d5fabe. The list of files in scope can be found in the Appendix. We have also conducted the review of fixes on the commit hash b70348e6998e35282212243ea639d174ced1ef2d.

After some time DRAM team identified that another coin with the same symbol was deployed and have made a decision to change the token symbol from DRM to DRAM. This update was done in commit 70fc1cd171acf0997f034e50e2ff53f44ef4e452 and does not modify anything else in the contracts that were a part of the audit.

2.1 Objectives

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

1. Correctness of the implementation, consistent 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 System Overview

The code in question is a new stable coin that is going to be called Dram and will be primarily backed by the United Arab Emirates currency Dirham. As of right now the stable coin will be minted and initially distributed by the team.

Here are few notable functionalities present in the stable coin’s contract:

• Freezing - malicious actor’s account can be frozen which will prevent Dram from being sent to or from them.
• Minting and Burning - DRAM team can mint and burn the tokens as well as offer the ability to mint Dram to different operators up to a certain cap.
• Pausing - Dram transfers can be paused completely.

4 Security Specification

This section describes, from a security perspective, the expected behavior of the system under audit. It is not a substitute for documentation. The purpose of this section is to identify specific security properties that were validated by the audit team.

4.1 Actors

The relevant actors are listed below with their respective abilities:

• Role Manager - account that is responsible for adjusting the mint-caps (amount a specific wallet could mint) as well as granting new roles to other accounts.
• Regulator - account that is capable of freezing and unfreezing the holder accounts. This will in turn either pause or unpause transfers of the tokens from and to the frozen account.
• Supply Manager - account that is responsible for minting and burning the tokens that were either approved or transferred to it.
• Admin - account that is capable of doing all of the above actions.

4.2 Trust Model

It’s worth noting that the Dram contracts are heavily centralized, and there are some basic assumptions about how the whole system will work that we should talk about.

The key thing to know about these contracts is that they can be upgraded. Depending on how they’re set up, the functions of these contracts might change whenever necessary.

Most of the important actions in the contract are controlled by specific roles that manage things like creating or destroying tokens, as well as freezing accounts. It’s crucial that these roles are well-protected and not vulnerable to any misuse by malicious parties.

As for the team at DRAM, they plan to put most roles, except for the REGULATORY_MANAGER_ROLE, behind a timelock contract. This means there’s a waiting period before those roles can take action. However, the REGULATORY_MANAGER_ROLE won’t have this delay since regulators might need to act quickly in emergencies. All these roles will be set up in a way where only the team’s multi-signature wallets can propose any changes to the contracts. It’s important to mention that while this setup is the plan, we can’t guarantee it will always be followed exactly, given the amount of human element involved.

5 Findings

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.

// solhint-disable-next-line func-name-mixedcase
function __DramAccessControl_init_unchained(
    address admin
) internal onlyInitializing {
    _grantRole(ADMIN_ROLE, admin);
    _grantRole(ROLE_MANAGER_ROLE, admin);
    _grantRole(SUPPLY_MANAGER_ROLE, admin);
}

function setMintCap(
    address operator,
    uint256 amount
) external onlyRoleOrAdmin(ROLE_MANAGER_ROLE) {
    _setMintCap(operator, amount);
}

abstract contract DramMintable is
    Initializable,
    IDramMintable,
    ContextUpgradeable,
    ERC20Upgradeable
{

) external onlyRole(SUPPLY_MANAGER_ROLE) {

function burn(uint256 amount) external onlyRole(SUPPLY_MANAGER_ROLE) {

Appendix 1 - Files in Scope

This audit covered the following files:

Appendix 2 - Disclosure

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