Smart Contract - HubCircleTokenPool  (USDC)

Smart Contract - HubNonBridgedTokenPool (AVAX)

Smart Contract - HubNonBridgedTokenPool (ETH Ethereum Sepolia)

Smart Contract - HubNonBridgedTokenPool (ETH Base Sepolia)

Smart Contract - AlwaysEligibleAddressOracle

__Asset Accuracy Assurance__

Bugs found on assets incorrectly listed in-scope will be considered valid and be rewarded.

__Private Known Issues Reward Policy__

Private known issues, meaning known issues that were not publicly disclosed, are valid for a reward.

__Known Issue Assurance__

Folks Finance commits to providing Known Issue Assurance to bug submissions through their program. This means that Folks Finance will either disclose known issues publicly, or at the very least, privately via a self-reported bug submission. 

In a potential scenario of a mediation, this allows for a more objective and streamlined process, in order to prove that an issue is known. Otherwise, assuming the bug report is valid, it would result in the report being considered as in-scope, and due a reward.

__Primacy of Impact vs Primacy of Rules__

Folks Finance adheres to the Primacy of Impact for all impacts.

Primacy of Impact means that the impact is prioritized rather than a specific asset. This encourages security researchers to report on all bugs with an in-scope impact, even if the affected assets are not in scope. For more information, please see Best Practices: Primacy of Impact 
When submitting a report on Immunefi’s dashboard, the security researcher should select the Primacy of Impact asset placeholder. If the team behind this project has multiple programs, those other programs are not covered under Primacy of Impact for this program. Instead, check if those other projects have a bug bounty program on Immunefi.
If the project has any testnet and/or mock files, those will not be covered under Primacy of Impact.
All other impacts are considered under the Primacy of Rules, which means that they are bound by the terms and conditions set within this program.

__Eligibility Criteria__

Security researchers who wish to participate must adhere to the rules of engagement set forth in this program and cannot be:
- On OFACs SDN list 
- Official contributor, both past or present
- Employees and/or individuals closely associated with the project 
- Security auditors that directly or indirectly participated in the audit review

__Responsible Publication__

Whitehats may publish their bug reports after they have been fixed & paid, or closed as invalid, with the following exceptions:
- Bug reports in mediation may not be published until mediation has concluded and the bug report is resolved.

Immunefi may publish bug reports submitted to this audit competition and a leaderboard of the participants and their earnings.

__Feasibility Limitations__

The project may be receiving reports that are valid (the bug and attack vector are real) and cite assets and impacts that are in scope, but there may be obstacles or barriers to executing the attack in the real world. In other words, there is a question about how feasible the attack really is. Conversely, there may also be mitigation measures that projects can take to prevent the impact of the bug, which are not feasible or would require unconventional action and hence, should not be used as reasons for downgrading a bug's severity.

Therefore, Immunefi has developed a set of [feasibility limitation standards](https://immunefisupport.zendesk.com/hc/en-us/articles/16913132495377-Feasibility-Limitation-Standards) which by default states what security researchers, as well as projects, can or cannot cite when reviewing a bug report.

__Immunefi Standard Badge__

By adhering to Immunefi’s best practice recommendations, Folks Finance has satisfied the requirements for the [Immunefi Standard Badge](https://immunefisupport.zendesk.com/hc/en-us/articles/15006865432209-The-Immunefi-Standard-Badge).

zarkk

nnez

A2Security

alix_40

kankodu

ethprotector

JCN2023

OxAnmol

Shahen

arno

Tripathi

chista0x

Nyksx

cryptoticky

bbl4de

jovi

OxSCSamurai

gizzy

Lastc0de

IronsideSec

Pavan

QuantumKid

Obin

Ironside_Sec

Paludo0x

Kalogerone

OxG0P1

twcctop

iamandreiski

seesnap

https://drive.google.com/file/d/1NI_O0_lJ6w9emEJlDogF5M_BCLkf8mNX/view?usp=sharing

Folks Finance is a leading DeFi platform providing innovative tools for lending, borrowing, trading and managing digital assets, all in one place.

Contract fails to deliver promised returns, but doesn't lose value

Theft of unclaimed yield

Theft of unclaimed royalties

Permanent freezing of unclaimed yield

Permanent freezing of unclaimed royalties

Temporary freezing of funds of at least 24h

Smart contract unable to operate due to lack of token funds

Griefing (e.g. no profit motive for an attacker, but damage to the users or the protocol)

Theft of gas

Unbounded gas consumption

Direct theft of any user funds, whether at-rest or in-motion, other than unclaimed yield

Permanent freezing of funds

Protocol insolvency

__Proof of Concept (PoC) Requirements__

A PoC, demonstrating the bug's impact, is required for this program and has to comply with the Immunefi PoC Guidelines and Rules.

__Whitehat Educational Resources & Technical Info__

1. Design Overview for Cross-chain Lending Protocol: [Link to Google Docs](https://docs.google.com/document/d/19HjdYSmSxoXf7b0RIjiv8cff7jwdGZ1lkFrjqRrogiE/edit?usp=sharing)

2. Operation lifecycle in cross-chain lending protocol: [Link to Google Docs](https://docs.google.com/document/d/1UEV2JHpW23ChARUp_AcHJjuuq6A9T-n85T3FDYQTuGM/edit?usp=sharing)

3. Formulae Used in Cross-chain Lending Protocol: [Link to Google Docs](https://docs.google.com/document/d/1UU-zhy-Ik6h-EhKS2TvcIsd0Q377H7HKF6MGP5WdwAk/edit?usp=sharing)

4. Testnet for Cross-chain Lending Protocol:
   [Link to Testnet](https://testnet.xapp.folks.finance/)

5. Smart Contract README for Cross-chain Lending Protocol:
   [Link to GitHub README](https://github.com/Folks-Finance/folks-finance-xchain-contracts/blob/main/README.md)

6. Docs for Existing Folks Finance Products:
   [Link to Folks Finance Docs](https://docs.folks.finance/)

7. Medium Articles:
   [Link to Medium Articles](https://folksfinance.medium.com/)

__Is this an upgrade of an existing system? If so, which? And what are the main differences?__

This is a new cross chain lending protocol that follows a similar model to our existing Algorand lending protocol. The loans and economic structure are the same with the only difference being how liquidations work. All the cross chain infrastructure is new. 

The cross chain lending protocol also uses an oracle design from Synthetix which takes up less than 5% of the total codebase. The codebase language is fully Solidity. 


__Where do you suspect there may be bugs? Useful aspects of this question are:__

Which parts of the code are you most concerned about?
What attack vectors are you most concerned about?
Which part(s) of the system do you want whitehats to attempt to break the most?
Are there any assumed invariants that you want whitehats to attempt to break?

In general all parts of the code should be checked and attack vectors explored. We write here some areas to look at in particular but this is not to discount any other areas.

One area to explore is the communication between chains. Messages are relayed between the spoke chain and the hub chain via Chainlink CCIP and Wormhole Messaging. In addition, Circle CCTP is used for USDC transfers. It is important to verify that we are using these protocols as intended and have correctly reasoned about the lifecycle of a message. 

We have a contract named “HubAdapter” which mimics the behaviour of the Chainlink CCIP and Wormhole messaging, without actually relaying anything. Its purpose is to have a common interface for interacting with the protocol through the spoke contracts regardless of whether on the hub chain or not.

We also have a new process for liquidations which should be checked both economically and codewise. The oracle integration is also new and should be checked for resistance against tampering.

One invariant to ensure that there is sufficient funds such that if all borrowers repaid their loans, all depositors can withdraw their tokens. Not an invariant, but the average stable interest rate should be closely tracking the weighted average of all the stable borrows for a given pool.

__What ERC20 / ERC721 / ERC777 / ERC1155 token standards are supported? Which are not?__

ERC20 and ERC777 are the only two supported. The modular design allows ERC1155 to be supported in the future too if needed.

__What emergency actions may you want to use as a reason to invalidate or downgrade an otherwise valid bug report?__

We have rate limiting which sets the maximum amount which can be withdrawn or deposited. If the limit is consumed through a denial of service attack, we have the ability to temporarily boost the capacity.

Other mitigating actions we can take involve removing/adding an adapter, lowering rate limits, lowering pool caps and deprecating a pool. If the bug report’s impact is small in the scope of the protocol as a whole, considering the possible mitigations, then that could be reason to invalidate or downgrade the severity.


__What addresses would you consider any bug report requiring their involvement to be out of scope, as long as they operate within the privileges attributed to them?__

E.g An ‘Operator’ address with the ability to pause smart contracts who could use their privileged functions to exploit a bug and steal funds

All admin and role addresses, as well as 3rd party infrastructure the project relies on. 


__What external dependencies are there?__

- Chainlink Price Feeds
- Pyth Price Feeds
- Folks Finance Centralised Fallback Oracle
- Wormhole’s Messaging
- Chainlink’s CCIP
- Circle’s CCTP

__Where might whitehats confuse out-of-scope code to be in-scope?__

The external services such as the WormholeRelayer, Chainlink CCIP RouterClient and external oracle services. 


__Are there any unusual points about your protocol that may confuse whitehats?__

We have our own standard of sending and receiving messages. Certain operations require finality as they involve a value transfer while the others can be immediately relayed. There is the “HubAdapter” too which is mentioned above.

We split tokens into two categories in our lending protocol. The first are tokens which are not bridged and remain on the spoke chain e.g. ETH, Link. The second are tokens which are bridged and reside on the hub chain e.g. USDC.

Our lending protocol also is different from others in that a user can have multiple loans, and that a loan can have multiple collaterals and borrows within it. We also define various loan types which have their own respective parameters. One of these is the “deposit” loan type which has borrow caps of zero for every token.


__What is the test suite setup information?__

If this is already provided in Github, then linking that resource is enough.

It will be in the GitHub report with the rest of the code. 


__Public Disclosure of Known Issues__

Bug reports covering previously-discovered bugs (listed below) are not eligible for a reward within this program. This includes known issues that the project is aware of but has consciously decided not to “fix”, necessary code changes, or any implemented operational mitigating procedures that can lessen potential risk. 
- Griefing through consuming external rate limits of tokens e.g. Circle CCTP rate limits for USDC
- Griefing through consuming internal rate limits where we have the ability to respond by temporarily boosting capacity

__Previous Audits__

Folks Finance’s completed audit reports can be found at https://github.com/Folks-Finance/audits/blob/13f8d8307902e8ff7018fe9b6df0b5668c638863/OtterSec%20-%20Audit%20of%20XChain%20Lending%20-%20May%202024.pdf. Any unfixed vulnerabilities mentioned in these reports are not eligible for a reward.

The following reward terms are a summary, for the full details read our [Folks Finance Audit Competition Reward Terms](https://immunefisupport.zendesk.com/hc/en-us/articles/26758465696785-Folks-Finance-Audit-Competition-Reward-Terms)

The reward pool will be entirely distributed among participants. The size depends on the bugs found:
If no High or Critical severity bugs are found the reward pool will be **$50,000 USD**
If one or more High severity bugs are found the reward pool will be **$75,000 USD**
If one or more Critical severity bugs are found the reward pool will be **$100,000 USD**


For this audit competition, duplicates and private known issues are valid for a reward.

Rewards are distributed according to the impact of the vulnerability based on the Immunefi [Vulnerability Severity Classification System V2.3](https://immunefi.com/immunefi-vulnerability-severity-classification-system-v2-3/). 

__Reward Payment Terms__

Payouts are handled by the Folks Finance team directly and are denominated in USD. However, payments are done in USDC

Rewards will be distributed all at once based on Immunefi’s distribution formula after the event has concluded and the final bug reports have been resolved.

Folks Finance’s up to date codebase can be found at https://github.com/Folks-Finance/folks-finance-xchain-contracts.

NAME	EARNINGS	TOTAL VALID BUGS	INSIGHTS	CRITICAL	HIGH	MEDIUM/LOW
1 zarkk	$26,633	5	1	1	1	3
2 nnez	$12,485	11	0	2	0	9
3 A2Security	$10,319	9	1	2	1	6
4 alix_40	$6,838	2	1	0	1	1
5 kankodu	$6,536	1	0	1	0	0
6 ethprotector	$5,695	2	0	1	1	0
7 JCN2023	$5,217	6	0	1	0	5
8 OxAnmol	$4,004	2	3	1	0	1
9 Shahen	$3,028	2	0	1	0	1
10 arno	$2,828	2	1	1	0	1
11 Tripathi	$1,923	4	1	0	0	4
12 chista0x	$1,737	3	2	0	0	3
13 Nyksx	$1,703	2	0	0	1	1
14 cryptoticky	$1,606	2	1	0	0	2
15 bbl4de	$1,323	2	1	0	0	2
16 jovi	$1,052	1	1	0	0	1
17 OxSCSamurai	$980	0	1	0	0	0
18 gizzy	$875	2	0	0	0	2
19 Lastc0de	$688	1	0	0	0	1
20 OxAnmol	$688	1	0	0	0	1
21 IronsideSec	$688	1	0	0	0	1
22 Pavan	$649	1	1	0	0	1
23 QuantumKid	$501	1	0	0	0	1
24 Obin	$501	1	0	0	0	1
25 Ironside_Sec	$446	2	0	0	0	2
26 Paludo0x	$283	2	0	0	0	2
27 Kalogerone	$213	2	0	0	0	2
28 OxG0P1	$213	2	0	0	0	2
29 twcctop	$167	1	0	0	0	1
30 iamandreiski	$133	2	0	0	0	2
31 seesnap	$47	1	0	0	0	1

Audit Comp | Folks Finance

Status

Status