Auditing Compound Protocol

I’m the security guy for OUSD. Currently we are the #8 holder of cUSDT and the #10 holder of cUSDC, and growing rapidly - yesterday 29 million stables were deposited into OUSD. I don’t want something happening to that money. My goal here is that Compound not lose a pile of money suddenly.


The Compound codebase needs a first tier audit. It is madness to continue the current ad-hoc deployment of new code changes. This is one of the biggest protocols in Defi. It is vital that each code change pass a serious code review.

As far as I can tell, everyone here is in agreement on the need for an audit, and the need for code change reviews.

Beyond that, Compound’s single collateral pool design means that a security failure of any listed coin could empty all the liquidity of all Compound lending pools. Both coins that destroyed CREAM, and the coin that could have destroyed AAVE, would have wrecked Compound had they been listed here. Compound governance’s strong bias for not listing coins has probably saved the protocol.

A listed coin is a much a part of the security of Compound as the Compound codebase itself. Listing a new coin requires a high bar of security and economic analysis. It’s an integral part of the security of Compound.


Individuals making code contributions can’t be expected to negotiate, schedule, and pre-fund an audit of their own code that then may or may not even be approved for payment. Even for good teams with existing auditor relationships, it is difficult to quickly get an auditor lined up to review code changes. If we want Compound to have any development velocity, there needs to be a friction free way of getting excellent code reviews on all changes that is not up to the individual contributor. Both of these proposals provide that, and this is good.

This capability is not cheap no matter how it is done, and that is okay.


One long term alternative is for Compound to build out their own internal security team to handle the majority of the security work.

The proposals from OZ, Trail of Bits, and Certora all assume that Compound has an internal development/security team. This isn’t the case as far as I can tell from forum lurking. Compound development currently seems to be individuals making ad-hoc proposals, and no one really checking them, outside sometimes getting a random external audit.

Four million dollars, even in this market, does buy a substantial amount of developer/security time. The ideal mix of internal and and external from both a cost and security perspective probably isn’t being 100% external.

But while the long term solution may be different, it is urgent to put Compound on a better security footing. I’d run a version of one of these proposals for a year and use that time to plan and build out the longer term solution.


It would be good for external security proposals to reflect the current Compound security staffing, rather than that of a typical project.


I am strongly against any form of “performance fee”. That seems like it would reward gaming the system, more than just doing the job and getting paid / earning the reputation. I think performance fees have has strong downsides. It’s a distraction for everyone involved. The auditors don’t want to be the ones that signed off on the code change that got one of the largest defi projects hacked. That’s enough.

Unless someone has an epic, genius idea, let’s just nix anything to do with performance bonuses.

If an auditor is willing to do so, denominating the payment amount in COMP would be an alignment that would be good, and easy to do. If not, I understand.


I don’t have any friendships with anyone at either OZ or Trail of Bits. I’ve had audits by both. Both were professional, competent, and reasonably through.

I preferred the OZ experience, but I know other people who have preferred working with Trail of Bits. I’m assuming your experience and strength of audit is based on which individuals are assigned to your audit team.

In either case, either company is first tier and capable of providing a good team.

The two proposals are currently at the same price. Of the two current proposals, the OZ proposal offers more, and I lean that way.

Both proposals would make a marked security improvement over the current situation. In my opinion, given the funds in Compound, both bring more value than they cost.

Both the OZ proposal and the Trail of Bits are obviously overpriced, and also contain low value filler to pad the dollar value of the proposal.

Because these proposals are currently overpriced there’s a lot of weird dynamics going on in this thread from both parties, as they try to get the cash cow, while not getting into a bidding war and driving the price down.

How to properly negotiate in this open forum is beyond the scope of what I’m willing to think about on my Thanksgiving day off. :slight_smile:

Compound needs an audit, needs a system for auditing future changes, and needs it now. We should have a deadline, and go for it.

Happy Thanksgiving!

4 Likes

Plenty of things to respond to here; it may be a good idea to do so before the post-Thanksgiving dinner food coma.

First of all, I’d like to thank @allthecolors for his pragmatic reply. It’s always a bit difficult to communicate all of the information one has on the forums: private conversations happen of course, and relaying every bit of detail that happens in private can be cumbersome. As a result, many forum posts are (rightfully) questioned by the outside observer.

Now to address @allthecolors’ comment directly. A sizable chunk of my net worth is in COMP, so when the Proposal 62 exploit happened, I was quite frustrated that a simple and avoidable process failure wasn’t being rectified. In my mind, the fastest fix was to get a top-tier auditor to review every single governance proposal for Compound. I ran the idea by a few folks in the community, and after they responded favorably to the idea, I decided to reach out to the audit firms. When you need help with something, you naturally turn to the folks you’re closest with first. I had pre-existing relationships with the OZ folks, so I reached out to them first. A few days after speaking with OZ, I reached out to Trail of Bits, ConsenSys Diligence, and Sigma Prime (it took some time for me to get connected with them). In each case, I told each of them the same information: Compound protocol needs an auditor, you should bid for the work, and I personally have a personal and economic relationship with OZ. Conflicts of interest are unavoidable; as long we’re transparent about them, we should be able to achieve fair and favorable outcomes.

I’d also like to share some thoughts on the process by which Compound protocol chooses an auditor. Clearly, this whole shebang is a first for Compound: we’ve never had to deal with multiple vendors bidding for the same work, which means we’ve never had to establish a process for choosing the winner. Is this an annoyance to vendors looking to work with Compound? Absolutely. Is Compound protocol the one spending millions of dollars for the work? Yeah. In my book, the guy who is opening his wallet is the one who dictates the terms of engagement. To that end, it’s my opinion that Compound should be laying out the process by which it buys things rather than the other way around.

Practically speaking, Compound doesn’t make any decisions on its own (wouldn’t that be nice); it’s the tokenholders/community that make the decisions. How then should tokenholders/community members proceed on making the decision of which vendor wins the audit work? I’d like to propose several options:

  • Tokenholders delegate purchasing authority to a group of individuals. The idea here is it’s impractical to have a tokenholders/community members evaluate vendors. Most large tokenholders aren’t experienced in evaluating audit vendors; instead, they could delegate authority to a group of experienced folks to make the purchasing decision on their behalf. This group of folks could evaluate the vendors, publish an analysis, and make a recommendation to tokenholders. If the tokenholders agree, they would vote for the “recommended” vendor.

  • Tokenholders vote on the vendor. A faster but slightly more chaotic process would be for tokenholders/community members to informally assign a deadline by which interested audit firms must submit proposals. After that date, no new proposals will be accepted. The “accepted” proposals can then be put up for an on-chain vote. Let the best vendor win!

As far as timing goes (if we go with the second option), I think it’s fair to honor OZ’s request of having the vote start on December 6. As part of that, we can set an informal rule saying that all proposals must be submitted on the forums a week before that — November 29. Would that mean that vendors posting their proposals after that are automatically disqualified from the vote? No. But it would mean that they would be tardy to the informal deadline set by the community, which reflects poorly on them. And if they can’t get their act together by then, then do we really want them as our vendor of choice? Probably not.

Anyway, that’s how I’d go about it. Now for some turkey…

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For what it’s worth, I agree with the dates suggested by Open Zeppelin here. We’ll post a full proposal within the next day and think it’s appropriate to have a vote shortly after.

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@jacobpphillips, @sukernik, @allthecolors, @dvf, @dguido thank you, great recent comments and feedback.

It seems like now is a good opportunity to “clear the air” and address several items as well as specificities related to this Proposal and discussions.

First and foremost, we are new to working and partnering with DAOs and made some assumptions about the speed at which we should approach this process. We were also surprised by the lack of competing bids during the 2-3 week period that we presented our proposal. We assumed, incorrectly, that given the lack of bids we should go ahead and press forward with a vote. We did consult with various folks privately and they also felt it was strange that no other firms jumped into the fray. As such we went forward, even though we understand that people like @Getty were publicly pushing for competition. We understand this could have looked like we were pushing through a vote without proper competition or time for the community to reflect. However if you put yourself in OpenZeppelin's position, it made sense to continue moving forward with the process. Even in retrospect we still are not sure how we would have known when the right time to pull the trigger would have been, but understand how this could have been perceived as high pressure. @allthecolors and others hope that give some context

Secondly in regards to the streaming payment method we chose, it had been used before, and given the parameters available made more sense to use than asking for a lump sum payment for a year or half year etc. We felt that it would have been wrong for us to ask for a bunch of money upfront as opposed to having it stream out and let governance end the stream when appropriate. Lesson learned here as well…@arr00 and others hoping this gives our perspective. Please let us know what you would have suggested here...

Thirdly, in regards to the performance fee and its binary nature. We listened to the initial feedback and given the complexities of changing it, specifically suggested that the community continue discussing the fee and delay it until the end of March next year. We did not include this fee in our formal proposal for the vote Also, at the last community call, we discussed that we were postponing the decision on this fee and also discussed that it would make sense for us to roll in concepts that blockchain @ berkeley were proposing vis a vis bug bounties.

We now understand that even though competition was demanded, even necessary for some, Compound Governance doesn’t have a tried and true mechanism for evaluating competing vendors and that we are treading on new ground here. Therefore we are happy to be patient as the Community deliberates on what the best way forward is here.

In the meantime, we will be revising our proposal to reflect community feedback and our new thinking on the performance fees, as well as various Q&A that has come from this process.

Please keep the feedback coming and we look forward to all your thoughts and comments!

6 Likes

Security Solutions for DAOs

Overview

We live in a new world where more and more DAOs are in control of a project. Ensuring that safe choices are made is a major challenge and DAOs have been exploring different approaches. According to current proposals, Compound would effectively outsource their security to a vendor who would take care of various security-related needs.

We believe that this approach is not the route to take. The chosen audit company would become a critical dependency for the protocol. The suggested solutions with their intransparent, quarterly, lump-sum payment for a mix of services do not focus on the most effective tools. Hence, we would like to suggest a process that can leverage the strength of the security community.

The main security challenge for a protocol like Compound is the growing complexity that needs to be taken into account with every change:

  • Due to upgradability, Compound needs to ensure compatibility with previous versions. Failure to do so can have significant consequences.
  • As cTokens are used in various other DeFi protocols, these integrations must not be affected by the proposed changes.
  • While certain governance votes are being voted on, others are in development or under review. This creates complicated dependencies.
  • As the Compound protocol grows and starts to consist of more contracts it must be ensured that all contracts still interact correctly. A current compound liquidation involves roughly ten contracts and roughly fifty calls between these contracts.

Overall, we conclude that such systems exhibit quadratic complexity growth. To tackle this, we aim for scalability. Furthermore, we believe that the security can best be ensured by a broad base of security providers. This prevents any form of vendor lock-in and conflicts of interest, while allowing to combine the strengths of different providers.

Suggested Process in a Nutshell

Our suggested process is as follows and acts on different stages of the DAO:

In detail our process has the following steps:

  • Early feedback during RFP stage with code reviewers adding security consideration paragraphs

    • This often reduces review cycles and hence development costs, review costs and time-to-market as code reviewers can foresee likely issues
    • Example: Security considerations for RFP 8: Balancer V2 liquidity as collateral | $25k

      The RFP aims to allow Balancer V2 liquidity as collateral. Recent attacks against cream.finance have shown that repeated borrowing can create an extremely leveraged position. When reviewing the security, special care must be taken to ensure that the value of the liquidity tokens cannot be artificially inflated. This would cause the protocol to lose funds as the collateralization ratio is insufficient to compensate for the price change. An attacker could extract these protocol losses and hence retroactively finance the artificial inflation of the liquidity token values.

  • Perform thorough code review of newly developed code

    • Thorough expert code review of to-be-deployed code is still the most effective tool available today.
    • Code reviewers inform the developers about all shortcomings related to security, efficiency or design.
    • During code review, code reviewers jointly contribute to an audit suite by encoding all successful attacks as well as attacks that are currently not possible but might work in the future.
  • Develop an audit suite

    • Composed primarily of extensive tests executable against forked mainnet at any point in time, allowing to continuously evaluate the security of the protocol and new proposal
    • The audit suite is open source under the same license as Compound Smart Contracts (BSD-3). It must be executable publicly without restriction by having suitable licenses in place for potentially proprietary components.
  • Leverage tool-based analysis where efficiently possible

    • Program Verification Tools currently cannot show correctness for a protocol as complex as Compound.
    • Use tools selectively with more complicated techniques to validate correct behavior of subsystems, e.g., formal verification, static analysis or fuzzing.
  • Perform the Proposal Verification

    • Once the development has completed, the proposal is prepared on-chain.
    • The extended test against forked mainnet of the audit suite allow anyone to verify the compatibility of the proposal. In particular they can check that the proposal does not break any integrations and is compatible with previous versions.
    • As the proposal includes the concrete parameters chosen, these parameters can be verified as part of this step.

In contrasts to other suggested processes, we focus on prevention. While monitoring is certainly nice to have, Compound already has some monitoring and attacks often take place in one (large) transaction. Hence monitoring and alerting have limited effectiveness, especially considering the present timelocks.

Finding Suitable Code Reviewers

The biggest hurdle for code reviewers getting into a new complex system is the required initial investment to understand it. Fluctuation and internal availability of employees also require any review companies to constantly invest into training, which can reduce either quality in times of high demand.

To tackle these problems, we propose the following general solution:

  • Compound Governance votes in several code reviewers each year to onboard into auditing through a paid training phase.

  • Auditors apply to become wardens of Compound by providing:

    • An example of how a code review for the Comptroller and the cToken would be performed, detailing methods and time required.
    • The cost and amount of hours reserved for Compound per quarter, which are if accepted guaranteed to be paid by Compound.
    • The expected compensation for the training phase.
  • On-boarding code reviewers can also greatly benefit from the existing audit suite which contains many relevant attack scenarios.

    • Any time reserved for Compound not spent on reviewing code or RFPs is used to improve this audit suite.
  • Auditors who are selected by Governance and complete the training take shared ownership of the audit suite and collectively improve the coverage.

    • Delivering good work in improving the Compound Audit Suite will likely be used to evaluate the quality of the auditor which aligns interests long-term by increasing the likelihood of being voted in again next year.

Benefits of the Audit Suite

  • Auditors think of many cases, most of which are not exploitable currently. Putting them in the suite helps to test for this case going forward. It aggregates knowledge from multiple code reviews and companies.
  • Expert know-how of the system and the possible attacks against it are captured for future auditors.
  • With testing against forked mainnet it is possible to simulate the effects of all the currently open proposals independently as well as combined.
  • The Audit Suite enforces the definition of explicit value ranges, making code reviews more effective and simplifying certain governance proposals which just update parameters within those ranges.
  • It provides extremely good feedback for developers reducing review cycles and thereby financial and temporal overhead.
  • Auditors will gain confidence in having audited the system holistically even when reviewing seemingly small changes.
  • Tasks that needs to be performed repeatedly, such as the compatibility check with past versions, can be automated once and efficiently repeated.
  • The suite ensures the correctness of on-chain proposals including correctly chosen parameters which are generally not part of the code review.
  • Given its design the audit suite provides a decentralized and permissionless mechanism for community members to inspect the state of the protocol and to evaluate ongoing proposals.

Considering all these benefits, we believe that the audit suite can provide the necessary scalability by capturing a lot of the growing complexity. It requires an initial investment to build it up, but we consider it worthwhile.

Summary

Our suggestion incentivizes broad participation from small to large security companies. Thereby, it broadens the base of experts in Compound and leverages proven techniques. Using the audit suite, we can aggregate the knowledge and insights from multiple audits (instead of only relying on the last audit) and thereby tackle the growing complexity. We believe that this provides a viable long-term solution.

While even a single audit company chosen to shepherd the protocol could write such an audit suite, only by having multiple companies who rely on each other to have covered critical parts of the system enforces that a public, high-quality audit suite gets created. It also allows every security provider to play to their strengths when contributing. Lastly, it allows a decentralized verification of proposals by any community member.

5 Likes

@sukernik @dguido @OZSecure
Hi everyone, I’m Rishabh from Blockchain at Berkeley.

Thank you to both the OpenZeppelin and TrailOfBits teams for starting a discussion of the need for more Compound security. While the entire community seems to agree on the need for security, there is the question of which company to procure those services from. I also agree with Larry that we should allow other security companies to forward their bid for the contract as well.

Overall, I believe, of the two options that Larry presents, the second is overall more beneficial to the protocol.

  1. Direct voting by tokenholders is most in-line with the spirit of decentralized governance. Voting should not be filtered through the lens of some pre-selected committee; it adds additional layers of unnecessary bureaucracy.
  2. In OZ’s original proposal, they highlighted the need for quick iteration on this issue. Other commenters have tended to agree. Direct voting lets one company start work on this issue as fast as possible, rather than having to wait for some committee to deliberate, then possibly multiple governance proposal cycles (if the tokenholders reject the committee’s recommendation).

However, the immediate problem with this idea is that Compound proposals have traditionally only supported only Yes, No, or Abstain votes. However, in the Governor Bravo contract, there is an option for voters to attach text to their on-chain votes. Thus, if we assign each candidate in our vote a two-letter code, we can measure the support for each option through the comments.

Supporting multiple options in proposals is also a necessary step for Compound governance, so that tokenholders can make more complex decisions in the future (i.e. elected positions, setting variable parameters, etc.).

1 Like

Hi Guys,

This is Rex from DeFiSafety. As I indicated in an article I wrote about the Compound Proposal 62, I believe this latest proposal is trying to solve the wrong problem. What Compound (and other protocols) need is not more 3rd party review but rather more staff. The Proposal 62 needed a PM and an internal software and process quality staff more than a third party auditor.

Protocols need more on the internal team watching and reviewing tasks before they present the results to an external auditor or a DAO. Based on my analysis of 62, the dev was mostly on his own. He wrote the code, wrote the tests, ran the tests, put the code on the testnet and asked the community to review and test. I never saw any evidence of actual community review. Finally, an external auditor looked it over and the result went to the DAO. I did write to the dev to get his comments on the article, but I did not get a response.

There did not seem to be an internal quality person or a PM. There did not seem to be internal dev process that might have said dev can’t write his own tests.

I believe a large protocol like Compound should have at least one internal QA person, a PM and a written process.

Is there a reason I have missed why protocols do not build internal staff? Could the staff be a target of regulatory attacks? But if that was true, it would be true of the auditors too, especially if they take over tasks that would be internal in the corporate world.

Another weakness I see is a lack of internal process documents. An example of this is that latest bZx EOA failure. The dev should not have used his main computer to execute trades on a major protocol account (remember Hughs’s exploit?) and the account should have had a multi-sig. There should be a public process document where bZx says how things should be done. In the case of COMP 62, the process should not have allowed one dev to do the entire requirements/code/test process on his own.

Actually, that inspires me. DeFiSafety can write a process doc, get community content and allow individual DAO’s to vote the document into their process. Perhaps Compound community could contribute?

I am not against more auditor participation and have nothing but praise for all the auditors in the chain of messages. DeFiSafety is not bidding for any work. We do not do consulting to protocols. Our goal is revenue from DeFi users so when we rate protocols like yours we are not in any conflict of interest.

However, our team watches DeFi protocols every day and thinks about problems from a process quality perspective. Please take this as our comments from that perspective. We are always available for discussions.

3 Likes

Please find our anticipated proposal below. We iterated on several items and terms that were present in our first draft, so there are a few refinements versus what I posted earlier!

I also spoke on Discord at the Compound Community Dev Call earlier today. I carved out my part of the presentation so you can listen to it briefly since it may add color to the proposal.

(For convenience, I also extracted the audio from ChainSecurity’s portion of the call.)

Executive summary

Compound seeks to prevent insecure proposals from being merged via the decentralized governance process. Trail of Bits will provide comprehensive software assurance services to mitigate this risk across three specific activities: consulting services, security engineering, and process creation.

We believe it is essential to create an easy-to-follow process with highly robust tools that makes security transparent, with or without a code review from Trail of Bits. We consider the primary goal as building capacity in the Compound ecosystem to secure itself. To that end, we will provide engineering efforts to develop critical security infrastructure and processes.

Trail of Bits will be paid the equivalent of $1 million USD in COMP every quarter for one year to provide the baseline services. This payment is all-inclusive of all services defined in the proposal.

Goals and Non-Goals

Goals of this effort include:

  • Prevent insecure code from being merged into Compound through the governance process, and ensure that any remaining risks of proposals under consideration are well known before a vote. Compound desires services that eliminate and illuminate these risks.
  • Provide first-class security tools and analytical capabilities to Compound developers. Compound developers must have every opportunity to analyze their code and understand its security ramifications. Compound desires a variety of tools that enable thorough inspection of code by developers and users.
  • Create repeatable processes that build capacity for security and avoid dependence on external audits or third-party services for security. Security efforts should result in higher quality code being developed by the Compound community over time through the adoption of consistent processes.

Non-goals of this effort include:

  • Deploy, configure, or maintain on-chain monitoring software. This goal does not address the security of governance proposals. These systems are an active field of research, may apply to fewer attacks than expected, or may have undesirable performance costs. Instead, we will commit to evaluating their opportunities and limitations during the project.
  • Further development of the bug bounty program. We support the formation of a bug bounty proposal to specifically address this issue. We will provide consultative advice to this proposal based on our years of experience seeing both ends of the bounty ecosystem.

Description of the Services

1. Consulting services

Trail of Bits will provide at least one full-time security engineer, with additional engineers supporting the project as needed, to perform the following consulting services:

  • Maintain a presence on Discord and the Compound forums. We will actively engage in conversation, reach out to developers as needed, and identify any new proposals.
  • Provide proposal authors with 1:1 counseling sessions. We will host a video call with the author to understand their goals and provide immediate feedback, including on the architectural design of their proposal and suggestions to reduce complexity.
  • Review and report any identified security issues in the code for proposals. We will describe the issue, a scenario to abuse it, and a recommendation to address it. We will work with proposal authors to validate fixes that result from these reports.
  • Define security properties for proposals. We will work with the authors to provide reasonable security invariants alongside the proposal and tests for them in Certora, Echidna, or other tools, as appropriate for the specific invariants under test.
  • Document “Security Considerations” for every proposal. We will contribute a standardized section to reviewed proposals to inform developers and users of limitations, risks, or other considerations to form an opinion about their vote on it.
  • Provide our analysis directly to the community. Before a vote on any governance issue, we will host a public community call, walk attendees through the documented Security Considerations, and run test suites, fully informing their decisions to vote.
  • Host bi-weekly Office Hours with developers. We will cover testing and verification tools, demonstrate new security processes and tools for Compound, and solicit feedback for new areas of development and guidance needed by the community.
  • Evaluate new security techniques for adoption by Compound. We will perform detailed evaluations of the applicability of these techniques directly on the Compound codebase, sharing our empirical results of efficacy and utility.
  • Ad-hoc services sourced from across Trail of Bits, as needed. This includes expertise from our separate teams for cryptography, application security, cloud-native security, threat modeling, machine learning, and other research teams. Our firm employs more than 80 researchers servicing clients in tech, defense, and finance on high-risk security challenges.

2. Security engineering

Trail of Bits will engineer solutions in software to critical security risks faced by Compound. We will ensure that first-class security tools are available, easy to use, and customized for use on Compound, with knowledge of Compound-specific risks built in.

  • Ensure that Slither, our static analysis framework, and Echidna, our rapid security property tester, always work on Compound code. These security tools are delicate machines that must ingest all code possible to write in Solidity and EVM. We will ensure that no breaking changes affect Compound for an extended period of time and these tools always “just work.”
  • Customize Slither and Echidna to the Compound codebase. We will extend each tool to understand Compound’s architecture, expected security properties, and third-party protocols, vastly enhancing their depth of results. For example, we can build static analyses that understand and aggregate data from Certora properties or that understand specific Compound interfaces.
  • Customize Slither to evaluate the security of upgrades. Upgradeability exposes low-level complexity with possibly disastrous results. Slither already evaluates for 17 such flaws, and we will enhance this analysis with Compound-specific conditions.
  • Develop scaffolding for new proposals with pre-integrated security analyses from Slither, Echidna, Certora, or others, as appropriate. These templates will provide secure beginnings for parameter changes, new tokens, protocol features, and governance changes.
  • Continuously define and evaluate security properties across the Compound codebase with analyses from Slither, Echidna, Certora, or other techniques, as appropriate. New proposals may expose under-specified areas of Compound that require greater formalization. We will work to fill in these gaps with new properties.

3. Repeatable processes

Trail of Bits will build the capacity of the Compound community to secure itself, minimizing dependency on external security audits for security and most efficiently using their time when engaged. We will define and socialize repeatable processes that encapsulate common tasks with security integrated within them. Adoption of these processes will set a floor on proposal quality, continuously secure proposals regardless of security auditor review, and improve the quality of proposals over time.

  • Design a repeatable process for starting a new proposal. We will develop onboarding guidance for developers that describes the end-to-end process for securely creating new proposals. Touchpoints will include security training, using pre-created templates, example security properties, guidance on tools, self-assessment, engaging with Trail of Bits for code review.
  • Design a repeatable process for proposal self-assessment. We will provide guidance to assess the security of proposals before sharing them publicly. This will facilitate more effective conversations about security with the community and Trail of Bits, knowing that an initial baseline has been met.
  • Design a repeatable process for risk assessment by the community. We will share the risk factors that security experts focus on when reviewing proposals and document steps to run testing and verification tools, thus providing a map for those voting on proposals to become better informed and obtain empirical evidence.
  • Design a repeatable process for evaluating third-party protocol integration risks. We will design a repeatable process to investigate the security considerations of new token implementations and other linkages to DeFi building blocks from Compound. We will document existing pitfalls and concerns in third-party code already used by Compound, and facilitate the discovery and documentation of others.
  • Design a repeatable process for other protocols to securely integrate with Compound. In the reverse of the above, we will describe security considerations for DeFi users of Compound. In our mind, any compromise involving Compound, even if it does not originate from our own code, will compromise its reputation.
  • Regularly update a “treasure map” for bug hunting in Compound. We will guide other security researchers to less specified, more risky areas of the code. We will regularly report statistics on these identified hotspots, such as % coverage for specifications.

Risks

Compound may have unknown, latent security vulnerabilities already present in the code. Our proposal focuses on new code added to Compound and, therefore, these issues may continue undiscovered. To mitigate this risk, we have included a) a task focused on specifying new security properties, as needed, and b) a task to build a treasure map to aid other bug hunters.

COMP holders may vote for proposals that contain documented security risk or that are otherwise highly risky, considering the reward to be greater in that circumstance. To mitigate this risk, we will a) add documented Security Considerations to every proposal and b) host a community call to walk through those considerations, demonstrate how to run included test suites, and evaluate the coverage of them.

Compound is highly complex and new proposals may use new features of Solidity or combine features of Solidity in ways that break the security tools upon which it depends. To mitigate this risk, Trail of Bits has specifically prioritized the development and testing of new features for Slither and Echidna against the Compound codebase.

Proposals may require swift approval without waiting for input from Trail of Bits, or input from Trail of Bits may be otherwise unavailable within the timeframe required due to unknown circumstances. To mitigate this risk, Trail of Bits has proposed a robust sequence of processes and tools for the community to enhance trust in themselves and better understand the risks of their actions.

Financial Terms

Trail of Bits will be paid the equivalent of $1 million USD in COMP every quarter for one year to provide the services. This payment is all-inclusive of all services defined in the proposal.

1 Like

I have to say that for the long-term, the model proposed by ChainSecurity seems to me to be the most comprehensive and beneficial to the protocol. I agree that cultivating an RFP process, and in general focusing on the codified process, regardless of auditor, is a direction I believe we should move in to put the protocol in the strongest position going forward. That said, I can see how signing an agreement with a single auditor to guarantee their time is something that could be more useful in the shorter term. I think it would be a great if we could find some sort of balance that moves us towards a robust process, without lock-in, but acknowledges some of the difficulties implementing the full RFP process immediately.

1 Like