Maximum Returns. Minimum Risk. Lend, borrow, and earn leveraged yield with DeFi's leading fixed rate lending protocol.
Scope
Contest Results
On what chains are the smart contracts going to be deployed?
mainnet, arbitrum
Which ERC20 tokens do you expect will interact with the smart contracts?
any, including USDC and USDT
Which ERC721 tokens do you expect will interact with the smart contracts?
none
Do you plan to support ERC1155?
Yes, Notional V3 supports ERC1155 via the ERC1155 Action contract for fCash. ERC1155 compatibility is not a primary focus for this audit.
Which ERC777 tokens do you expect will interact with the smart contracts?
none
Are there any FEE-ON-TRANSFER tokens interacting with the smart contracts?
There is limited support for listing fee on transfer tokens but they are explicitly restricted in leveraged vaults.
Are there any REBASING tokens interacting with the smart contracts?
Yes, specifically Aave v3 lending tokens. They will only be used in conjunction with the External Lending functionality. Rebasing tokens are not allowed to be listed as lending and borrowing currencies.
Are the admins of the protocols your contracts integrate with (if any) TRUSTED or RESTRICTED?
TRUSTED
Is the admin/owner of the protocol/contracts TRUSTED or RESTRICTED?
TRUSTED
Are there any additional protocol roles? If yes, please explain in detail:
Yes there are three roles in relation to Notional V3:
checkRebalance
and will rebalance those currencies accordingly.Is the code/contract expected to comply with any EIPs? Are there specific assumptions around adhering to those EIPs that Watsons should be aware of?
No
Please list any known issues/acceptable risks that should not result in a valid finding.
Prime Debt Cap:
It is understood that due to the nature of settlement, accounts may generate short dated fCash and push the system above the debt cap at maturity. This would be alleviated by tracking overall fCash debt outstanding, however, this adds significantly more complexity to the system and makes the debt cap more difficult to administer. If this does become an issue a mitigation would be a temporary increase in the supply cap. If this is a persistent issue, a more permanent mitigation would include a more comprehensive tracking and limiting of total fCash debts.
Please provide links to previous audits (if any).
Are there any off-chain mechanisms or off-chain procedures for the protocol (keeper bots, input validation expectations, etc)?
Yes see #3 in the additional protocol roles, the rebalancing bot.
In case of external protocol integrations, are the risks of external contracts pausing or executing an emergency withdrawal acceptable? If not, Watsons will submit issues related to these situations that can harm your protocol's functionality.
With respect to external lending, it is understood that Aave V3 may pause withdraws and prevent Notional from withdrawing its funds. A mitigation against this risk is only use external lending for liquid, well understood tokens.
Do you expect to use any of the following tokens with non-standard behaviour with the smart contracts?
USDC and USDT are the primary examples.
Add links to relevant protocol resources
Notional V3 Protocol Documentation: https://docs.notional.finance/notional-v3/
Audit Scope Documentation: https://docs.google.com/document/d/1-2iaTM8lBaurrfItOJRRveHnwKq1lEWGnewrEfXMzrI/edit
Total Rewards
Contest Pool
Lead Senior Watson
Judging Pool
Lead Judge
34,500 USDC
18,000 USDC
1,300 USDC
1,700 USDC
Status
Scope
Start Time
End Time
Finished
1,838 nSLOC
Jan 8, 2024, 3:00 PM
Jan 18, 2024, 3:00 PM