Synthetix Saiph Release Smart Contract Audit
# 1. Introduction
iosiro was commissioned by [Synthetix](https://www.synthetix.io) to conduct a smart contract audit of their Saiph Release, which included the following components:
* [SIP-235](https://sips.synthetix.io/sips/sip-235)
* [SIP-238](https://sips.synthetix.io/sips/sip-238)
* [SIP-240](https://sips.synthetix.io/sips/sip-240)
The audit of SIP-235 was performed on 23 May 2022 with 1 auditor, consuming a total of 1 resource day.
The audit of SIP-238 was performed from 6 to 7 June 2022 with 1 auditor, consuming a total of 2 resource days.
The audit of SIP-240 was performed on 24 May 2022 with 1 auditor, consuming a total of 1 resource day.
This report is organized into the following sections.
* **[Section 2 - Executive summary:](#section-2)** A high-level description of the findings of the audit.
* **[Section 3 - Audit details:](#section-3)** A description of the scope and methodology of the audit.
* **[Section 4 - Design specification:](#section-4)** An outline of the intended functionality of the smart contracts.
* **[Section 5 - Detailed findings:](#section-5)** Detailed descriptions of the findings of the audit.
The information in this report should be used to understand the smart contracts' risk exposure better and as a guide to improving the security posture of the smart contracts by remediating issues identified. The results of this audit reflect the in-scope source code reviewed at the time of the audit.
The purpose of this audit was to achieve the following:
* Identify potential security flaws.
* Ensure that the smart contracts function according to the documentation provided.
Assessing the off-chain functionality associated with the contracts, for example, backend web application code, was outside of the scope of this audit.
Due to the unregulated nature and ease of transfer of cryptocurrencies, operations that store or interact with these assets are considered high risk from cyber attacks. As such, the highest level of security should be observed when interacting with these assets. This requires a forward-thinking approach, which takes into account the new and experimental nature of blockchain technologies. Strategies that should be used to encourage secure code development include:
* Security should be integrated into the development lifecycle, and the level of perceived security should not be limited to a single code audit.
* Defensive programming should be employed to account for unforeseen circumstances.
* Current best practices should be followed where possible.
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# 2. Executive summary
This report presents the findings of a smart contract audit performed by iosiro of Synthetix's Saiph release.
[SIP-235](https://sips.synthetix.io/sips/sip-235) improved the modifier used in Issuer to ensure that only the trusted brige contract could mint assets on each chain. The modifier now validates the caller address is the valid bridge and ensures that the other bridge address is not set.
No issues were identified for this SIP as the implementation accorded with its specification and was of a high standard.
[SIP-238](https://sips.synthetix.io/sips/sip-238) restricted transfer operations on SNX and Synth transfers to only be callable through their proxy implementations. Certain system-internal contracts were permitted to call the implementation contracts to minimize changes to the system.
No issues were identified for this SIP as the implementation accorded with its specification and was of a high standard.
[SIP-240](https://sips.synthetix.io/sips/sip-240) corrected the calculation for the amount of debt to burn when liquidating an account with less transferrable SNX than the required amount. The new calculation scales the amount of debt to burn proportionately using the amount of transferrable SNX and required SNX.
No issues were identified for this SIP as the implementation accorded with its specification and was of a high standard.
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# 3. Audit details
## 3.1 Scope
The source code considered in-scope for the assessment is described below. Code from all other files was considered to be out-of-scope. Out-of-scope code that interacts with in-scope code was assumed to function as intended and not introduce any functional or security vulnerabilities for the purposes of this audit.
### 3.1.1 Synthetix SIP-235 smart contracts
**Project Name:** Synthetix<br/>
**Commit:** [c579267](https://github.com/Synthetixio/synthetix/commit/c579267ace79212b1e2e8b1b363ddd4d8df235a3)<br/>
**Files:** Issuer.sol
### 3.1.2 Synthetix SIP-238 smart contracts
**Project Name:** Synthetix<br/>
**Commit:** [28a8253](https://github.com/Synthetixio/synthetix/commit/28a8253013e9fa90507e451717a637e5227c4b47)<br/>
**Files:** BaseSynthetix.sol, Synth.sol, MultiCollateralSynth.sol
### 3.1.3 Synthetix SIP-240 smart contracts
**Project Name:** Synthetix<br/>
**Commit:** [7374109](https://github.com/Synthetixio/synthetix/commit/73741097a36b6584004e32281285328e5704121b)<br/>
**Files:** Issuer.sol
## 3.2 Methodology
The audit was conducted using a variety of techniques described below.
### 3.2.1 Code review
The source code was manually inspected to identify potential security flaws. Code review is a useful approach for detecting security flaws, discrepancies between the specification and implementation, design improvements, and high-risk areas of the system.
### 3.2.2 Dynamic analysis
The contracts were compiled, deployed, and tested in a test environment, both manually and through the test suite provided. Manual analysis was used to confirm that the code was functional and discover security issues that could be exploited. The coverage report of the provided tests as on the final day of the audit is given below.
### 3.2.3 Automated analysis
Tools were used to automatically detect the presence of several types of security vulnerabilities, including reentrancy, timestamp dependency bugs, and transaction-ordering dependency bugs. Static analysis results were reviewed manually and any false positives were removed. Any true positive results are included in this report.
Static analysis tools commonly used include Slither, Securify, and MythX. Tools such as the Remix IDE, compilation output, and linters could also be used to identify potential areas of concern.
## 3.3 Risk ratings
Each issue identified during the audit has been assigned a risk rating. The rating is determined based on the criteria outlined below.
* **High risk** - The issue could result in a loss of funds for the contract owner or system users.
* **Medium risk** - The issue resulted in the code specification being implemented incorrectly.
* **Low risk** - A best practice or design issue that could affect the security of the contract.
* **Informational** - A lapse in best practice or a suboptimal design pattern that has a minimal risk of affecting the security of the contract.
* **Closed** - The issue was identified during the audit and has since been satisfactorily addressed, removing the risk it posed.
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# 4. Design specification
The following section outlines the intended functionality of the system at a high level.
## 4.1 SIP-235
The specification of SIP-235 was based on commit hash [4687308](https://github.com/Synthetixio/SIPs/blob/4687308b5b05254efca3776d15c4d90105a2e929/content/sips/sip-235.md).
## 4.1 SIP-238
The specification of SIP-238 was based on commit hash [4687308](https://github.com/Synthetixio/SIPs/blob/4687308b5b05254efca3776d15c4d90105a2e929/content/sips/sip-238.md).
## 4.2 SIP-240
The specification of SIP-240 was based on commit hash [4687308](https://github.com/Synthetixio/SIPs/blob/4687308b5b05254efca3776d15c4d90105a2e929/content/sips/sip-235.md).
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# 5. Detailed findings
The following section details the findings of the audit.
## 5.1 High risk
No identified high-risk issues were open at the conclusion of the review.
## 5.2 Medium risk
No identified medium-risk issues were open at the conclusion of the review.
## 5.3 Low risk
No identified low-risk issues were open at the conclusion of the review.
## 5.4 Informational
No identified informational issues were open at the conclusion of the review.
## 5.5 Closed
No issues were closed during the audit.
