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Angle Protocol - Invitational
Findings & Analysis Report


Table of contents


About C4

Code4rena (C4) is an open organization consisting of security researchers, auditors, developers, and individuals with domain expertise in smart contracts.

A C4 audit is an event in which community participants, referred to as Wardens, review, audit, or analyze smart contract logic in exchange for a bounty provided by sponsoring projects.

During the audit outlined in this document, C4 conducted an analysis of the Angle Protocol smart contract system written in Solidity. The audit took place between June 28—July 7 2023.

Following the C4 audit, 3 wardens (Lambda, auditor0517, and Jeiwan) reviewed the mitigations for all identified issues; the mitigation review report is appended below the audit report.


In Code4rena’s Invitational audits, the competition is limited to a small group of wardens; for this audit, 5 wardens contributed reports to the Angle Protocol:

  1. auditor0517
  2. Jeiwan
  3. Lambda
  4. __141345__
  5. Udsen

This audit was judged by hansfriese.

Final report assembled by PaperParachute and liveactionllama.


The C4 analysis yielded an aggregated total of 10 unique vulnerabilities. Of these vulnerabilities, 3 received a risk rating in the category of HIGH severity and 7 received a risk rating in the category of MEDIUM severity.

Additionally, C4 analysis included 4 reports detailing issues with a risk rating of LOW severity or non-critical. There were also 2 reports recommending gas optimizations.

All of the issues presented here are linked back to their original finding.


The code under review can be found within the C4 Angle Protocol repository, and is composed of 24 smart contracts written in the Solidity programming language and includes 2276 lines of Solidity code.

Severity Criteria

C4 assesses the severity of disclosed vulnerabilities based on three primary risk categories: high, medium, and low/non-critical.

High-level considerations for vulnerabilities span the following key areas when conducting assessments:

  • Malicious Input Handling
  • Escalation of privileges
  • Arithmetic
  • Gas use

For more information regarding the severity criteria referenced throughout the submission review process, please refer to the documentation provided on the C4 website, specifically our section on Severity Categorization.

High Risk Findings (3)

[H-01] Possible reentrancy during redemption/swap

Submitted by auditor0517, also found by Lambda

Redeemers might charge more collaterals during redemption/swap by the reentrancy attack.

Proof of Concept

Redeemers can redeem the agToken for collaterals in Redeemer contract and _redeem() burns the agToken and transfers the collaterals.

    function _redeem(
        uint256 amount,
        address to,
        uint256 deadline,
        uint256[] memory minAmountOuts,
        address[] memory forfeitTokens
    ) internal returns (address[] memory tokens, uint256[] memory amounts) {
        TransmuterStorage storage ts = s.transmuterStorage();
        if (ts.isRedemptionLive == 0) revert Paused();
        if (block.timestamp > deadline) revert TooLate();
        uint256[] memory subCollateralsTracker;
        (tokens, amounts, subCollateralsTracker) = _quoteRedemptionCurve(amount);
        // Updating the normalizer enables to simultaneously and proportionally reduce the amount
        // of stablecoins issued from each collateral without having to loop through each of them
        _updateNormalizer(amount, false);

        IAgToken(ts.agToken).burnSelf(amount, msg.sender); //@audit-info burn agToken

        address[] memory collateralListMem = ts.collateralList;
        uint256 indexCollateral;
        for (uint256 i; i < amounts.length; ++i) {
            if (amounts[i] < minAmountOuts[i]) revert TooSmallAmountOut();
            // If a token is in the `forfeitTokens` list, then it is not sent as part of the redemption process
            if (amounts[i] > 0 && LibHelpers.checkList(tokens[i], forfeitTokens) < 0) {
                Collateral storage collatInfo = ts.collaterals[collateralListMem[indexCollateral]];
                if (collatInfo.onlyWhitelisted > 0 && !LibWhitelist.checkWhitelist(collatInfo.whitelistData, to))
                    revert NotWhitelisted();
                if (collatInfo.isManaged > 0)
                    LibManager.release(tokens[i], to, amounts[i], collatInfo.managerData.config);
                else IERC20(tokens[i]).safeTransfer(to, amounts[i]); //@audit reentrancy
            if (subCollateralsTracker[indexCollateral] - 1 <= i) ++indexCollateral;
        emit Redeemed(amount, tokens, amounts, forfeitTokens, msg.sender, to);

During the collateral transfers(direct transfer or in LibManager.release()), there might be a hook for the recipient in the case of ERC777 tokens.

Then the recipient might charge more collaterals by reentrancy like this.

  1. Let’s suppose there are 2 collaterals colA and colB. The transmuter contract contains 1000 amounts of colA and colB. Alice has 20 amounts of agToken.
  2. At the first time, Alice calls redeem() with 10 amounts of agToken and she should receive 10 amounts of colA and colB.
  3. As colA is an ERC777 token, she calls redeem(10) again inside the hook after the colA transfer.
  4. During the second redemption, total collaterals will be colA = 990, colB = 1000 because colB isn’t transferred in the first redemption yet.
  5. After all, Alice will receive more collaterals in the second redemption from this calculation.

I think a similar reentrancy attack might be possible during the swap as well.

I think we should add the nonReentrant modifier to the major functions like redeem()/swap().

Picodes (Angle) confirmed, but disagreed with severity and commented:

Valid. We had this in mind but thought it was ok as we don’t plan to accept collaterals with callbacks. However better than sorry and we may add the modifier.

hansfriese (Judge) commented:

@Picodes - LibManager.release() is called during the redemption and it might have a callback although the governance doesn’t accept collaterals with hooks.

Because the assumption is practical enough and the users can steal collaterals directly, will keep as High.

Angle mitigated:

Adds a reentrancy guard to several functions.

Status: Mitigation confirmed. Full details in reports from auditor0517, Lambda, and Jeiwan.

[H-02] The first disputer might lose funds although his dispute is valid

Submitted by auditor0517, also found by Udsen and Jeiwan

Users can dispute the current tree using disputeTree() and the governor refunds the dispute funds if the dispute is valid in resolveDispute().

    function disputeTree(string memory reason) external {
        if (block.timestamp >= endOfDisputePeriod) revert InvalidDispute();
        IERC20(disputeToken).safeTransferFrom(msg.sender, address(this), disputeAmount);
        disputer = msg.sender;
        emit Disputed(reason);

    /// @notice Resolve the ongoing dispute, if any
    /// @param valid Whether the dispute was valid
    function resolveDispute(bool valid) external onlyGovernorOrGuardian {
        if (disputer == address(0)) revert NoDispute();
        if (valid) {
            IERC20(disputeToken).safeTransfer(disputer, disputeAmount);
            // If a dispute is valid, the contract falls back to the last tree that was updated
        } else {
            IERC20(disputeToken).safeTransfer(msg.sender, disputeAmount);
            endOfDisputePeriod = _endOfDisputePeriod(uint48(block.timestamp));
        disputer = address(0);
        emit DisputeResolved(valid);

But disputeTree() can be called again by another disputer although there is an active disputer and resolveDispute() refunds to the last disputer only.

In the worst case, a valid disputer might lose the dispute funds by malicious frontrunners.

  1. A valid disputer creates a dispute using disputeTree().
  2. As it’s valid, the governor calls resolveDispute(valid = true) to accept the dispute and refund the funds.
  3. A malicious user calls disputeTree() by front running.
  4. Then during resolveDispute(true), the dispute funds will be sent to the second disputer and the first disputer will lose the funds although he’s valid.

disputeTree() shouldn’t allow another dispute when there is an active dispute already.

Picodes (Angle) confirmed, but disagreed with severity and commented:

Valid scenario and issue, although this is only a griefing attack, and the governance could still send back the funds to the first dispute using recoverERC20.

Considering the scenario is very unlikely as it would cost gas to the attacker for nothing, and easily fixable, I think this should be downgraded to Med

hansfriese (Judge) commented:

@Picodes - Will keep as High because honest disputers may lose their funds and it requires the governance’s additional work to recover.

Picodes (Angle) commented:

@hansfriese - indeed but when there is a dispute it requires additional work from the governance anyway. Like the permissions for resolveDispute and recoverERC20, and recoverERC20 is even cheaper. So the trust assumptions of the disputer are exactly the same with and without this issue: he trusts the governance to send him back its deposit at some point.

This whole disputeAmount / period thing is meant to prevent spam and to force disputers to behave correctly as they will lose some funds if they don’t, so someone using this attack vector also exposes himself to the governance deciding to not accept the dispute and seize the funds. Overall we will of course respect your final decision but still think med is more appropriate here

hansfriese (Judge) commented:

@Picodes - I totally understand your point and I’d like to mention two things.

  • The governance should refund one by one outside of the contract.
  • While checking disputeTree(), I see it doesn’t emit the disputer’s address and disputeAmount which would be changed later. So it wouldn’t be that easy to refund in practice.

I agree it’s between High and Medium and will keep as High.

Angle mitigated:

Applies the suggested fix.

Status: Mitigation confirmed. Full details in reports from Lambda, auditor0517, and Jeiwan.

[H-03] Poor detection of disputed trees allows claiming tokens from a disputed tree

Submitted by Jeiwan, also found by auditor0517

Users can claim rewards from a Merkle tree that’s being disputed. This can potentially lead to loss of funds since a malicious trusted EOA can claim funds from a malicious tree while it’s being disputed.

Proof of Concept

The Distribution.getMerkleRoot function is used to get the current Merkle root during claiming. The function is aware of the dispute period of the current root and returns the previous root if the current tree is still in the dispute period.

However, the function doesn’t take into account the situation when:

  1. a tree was disputed (i.e. the disputer address is set);
  2. and the dispute period has finished (i.e. when block.timestamp >= endOfDisputePeriod).

Such situations can happen realistically when a tree is disputed closer to the end of its dispute period and/or when the governor/guardian takes longer time to resolve the dispute. In such situations, the dispute period checks in the above functions will pass, however the disputer address will be set, which means that the tree is being disputed and shouldn’t be used in claims.

As an example exploit scenario, a malicious trusted EOA can add a Merkle tree root that lets them claim the entire balance of the contract. Even if the tree gets disputed quickly, the success of the attack boils down to how quickly the governor/guardian will resolve the dispute. To increase the chance, the attack can be deliberately executed when the governor/guardian are not active or available immediately.

When the disputer address is set (after a call to disputeTree), consider treating the current tree as disputed, no matter whether the dispute period has passed or not. E.g. consider these changes:

diff --git a/contracts/Distributor.sol b/contracts/Distributor.sol
index bc4e49f..8fb6a4c 100644
--- a/contracts/Distributor.sol
+++ b/contracts/Distributor.sol
@@ -197,7 +197,7 @@ contract Distributor is UUPSHelper {

     /// @notice Returns the MerkleRoot that is currently live for the contract
     function getMerkleRoot() public view returns (bytes32) {
-        if (block.timestamp >= endOfDisputePeriod) return tree.merkleRoot;
+        if (block.timestamp >= endOfDisputePeriod && disputer == address(0)) return tree.merkleRoot;
         else return lastTree.merkleRoot;

Picodes (Angle) confirmed

Angle mitigated:

Applies the suggested fix.

Status: Mitigation confirmed. Full details in reports from Lambda, auditor0517, and Jeiwan.

Medium Risk Findings (7)

[M-01] LibHelpers.piecewiseLinear will revert when the value is less than the first element of the array

Submitted by auditor0517

LibHelpers.piecewiseLinear reverts when the value is less than the first element of the array. This method is used in Redeemer contract and if the collateral ratio is below the first element of xRedemptionCurve, the redepmtion will revert.

Proof of Concept

In Redeemer._quoteRedemptionCurve, a penalty factor is applied when the protocol is under-collateralized using LibHelpers.piecewiseLinear.


        uint64[] memory xRedemptionCurveMem = ts.xRedemptionCurve;
        penaltyFactor = uint64(LibHelpers.piecewiseLinear(collatRatio, xRedemptionCurveMem, yRedemptionCurveMem));

xRedemptionCurveMem is strictly increasing and upper bounded by BASE_9, and there’s no more limitations.


230        (action == ActionType.Redeem && (xFee[n - 1] > BASE_9 || yFee[n - 1] < 0 || yFee[n - 1] > int256(BASE_9)))
233        for (uint256 i = 0; i < n - 1; ++i) {
234            if (
240                (action == ActionType.Redeem && (xFee[i] >= xFee[i + 1] || yFee[i] < 0 || yFee[i] > int256(BASE_9)))

So collatRatio can be less than the first element of xRedemptionCurveMem. In that case, LibHelpers.findLowerBound will return 0 and LibHelpers.piecewiseLinear will revert on the following line.


        yArray[indexLowerBound] +
        ((yArray[indexLowerBound + 1] - yArray[indexLowerBound]) * int64(x - xArray[indexLowerBound])) /
        int64(xArray[indexLowerBound + 1] - xArray[indexLowerBound]);

Redeemer._redeem calls _quoteRedemptionCurve, so the redemption will be blocked in this case.

We can add the following line to mitigate this issue.

    if (indexLowerBound == 0 && x < xArray[0]) return yArray[0];

Picodes (Angle) confirmed and commented:

Indeed we are assuming throughout the test base that the first value is 0 but the check is missing in the code so there this could happen. It’s kind of conditional to a misconfiguration though. Leaving it up to the judge.

hansfriese (Judge) commented:

@Picodes - Medium is appropriate because it’s likely to happen with the current configuration.

Angle mitigated:

Add a handler for this edge case.

Status: Mitigation confirmed. Full details in reports from Lambda, auditor0517, and Jeiwan.

[M-02] Unsafe cast in getCollateralRatio()

Submitted by auditor0517, also found by Lambda

LibGetters.getCollateralRatio() might return the incorrect ratio due to the unsafe cast.

Proof of Concept

getCollateralRatio() outputs the collateral ratio using the total collaterals and issued agTokens.

    // The `stablecoinsIssued` value need to be rounded up because it is then used as a divizer when computing
    // the amount of stablecoins issued
    stablecoinsIssued = uint256(ts.normalizedStables).mulDiv(ts.normalizer, BASE_27, Math.Rounding.Up);
    if (stablecoinsIssued > 0)
        collatRatio = uint64(totalCollateralization.mulDiv(BASE_9, stablecoinsIssued, Math.Rounding.Up)); //@audit unsafe cast
    else collatRatio = type(uint64).max;

Typically, the collatRatio should be around BASE_9 but the ratio might be larger than type(uint64).max during the initial stage.

Furthermore, totalCollateralization is calculated using the raw balance of collaterals and it might be manipulated when stablecoinsIssued is not large.

Then collatRatio might be cast to the wrong value.

After all, getCollateralRatio() will return the wrong ratio and it will affect the protocol seriously.

I think we should use the SafeCast library in getCollateralRatio().

Picodes (Angle) disagreed with severity and commented:

This seems hardly doable. Assuming there is 1 stablecoin issued (1e18), you’d need 1e28 collateral. Furthermore no impact is described: this would just break this view function. Overall I think Low severity is more appropriate

hansfriese (Judge) commented:

@Picodes - Although it’s an edge case, it’s likely to happen and getCollateralRatio() plays an important role in the protocol. Will keep as Medium.

GuillaumeNervoXS (Angle) commented:

To overflow the protocol would need to be 1 billion % over collateralise so it is not likely to happen.

hansfriese (Judge) commented:

As #9 shows, 1 USD is enough when stablecoinsIssued = 1 wei. I think it should be mitigated for safety.

Angle mitigated:

Adds safeCast.

Status: Mitigation error. Full details in reports from Lambda, auditor0517, and Jeiwan - and also shared below in the Mitigation Review section.

[M-03] Read-only reentrancy is possible

Submitted by auditor0517

The agToken might be minted wrongly as rewards due to the reentrancy attack.

Proof of Concept

There are redeem/swap logics in the transmuter contract and all functions don’t have a nonReentrant modifier.

So the typical reentrancy attack is possible during redeem/swap as I mentioned in my other report.

But besides that, the read-only reentrancy attack is possible from the SavingsVest contract, and the agToken might be minted/burnt incorrectly like this.

  1. The collatRatio is BASE_9(100%) now and Alice starts a swap from collateral to agToken in Swapper contract.
  2. In _swap(), it mints the agToken after depositing the collaterals.
    if (mint) {
        uint128 changeAmount = (amountOut.mulDiv(BASE_27, ts.normalizer, Math.Rounding.Up)).toUint128();
        // The amount of stablecoins issued from a collateral are not stored as absolute variables, but
        // as variables normalized by a `normalizer`
        collatInfo.normalizedStables += uint216(changeAmount);
        ts.normalizedStables += changeAmount;
        if (permitData.length > 0) {
        } else if (collatInfo.isManaged > 0)
        else IERC20(tokenIn).safeTransferFrom(msg.sender, address(this), amountIn); //@audit reentrancy
        if (collatInfo.isManaged > 0) {
            LibManager.invest(amountIn, collatInfo.managerData.config);
        IAgToken(tokenOut).mint(to, amountOut);

After depositing the collaterals, Alice might have a hook in the case of ERC777 tokens before the agToken is minted.

  1. Then Alice calls SavingsVest.accrue() inside the hook and getCollateralRatio() will return the incorrect ratio as the agToken isn’t minted yet.
  2. So collatRatio will be larger than the real value and additional rewards would be minted if collatRatio > BASE_9 + BASE_6.

Then Alice would get more rewards from the SavingsVest.

Recommend adding the nonReentrant modifer to getCollateralRatio() as well as redeem()/swap() functions.

Picodes (Angle) confirmed and commented:

So the assumption is that there is an accepted collateral ERC777, which is really unlikely as there is no credible candidate and it would bring additional risk. But the scenario is valid.

Angle mitigated:

Adds a reentrancy guard to several functions.

Status: Mitigation confirmed. Full details in reports from Lambda, auditor0517, and Jeiwan.

[M-04] estimatedAPR() might return the wrong APR

Submitted by auditor0517

estimatedAPR() might return the wrong APR and it will make users confused.

Proof of Concept

SavingsVest.estimatedAPR() returns the APR using the current vestingProfit and vestingPeriod.

    function estimatedAPR() external view returns (uint256 apr) {
        uint256 currentlyVestingProfit = vestingProfit;
        uint256 weightedAssets = vestingPeriod * totalAssets();
        if (currentlyVestingProfit != 0 && weightedAssets != 0)
            apr = (currentlyVestingProfit * 3600 * 24 * 365 * BASE_18) / weightedAssets;

First of all, it uses the current vestingRatio = vestingProfit / vestingPeriod for 1 year even if vestingPeriod < 1 year. I think it might be an intended behavior to estimate the APR with the current vesting ratio.

But it’s wrong to use the same vesting ratio after the vesting period is finished already.

In accrue(), it updates the vestingProfit and lastUpdate only when it’s overcollateralized/undercollateralized more than 0.1%.

So lastUpdate wouldn’t be changed for a certain time while collatRatio is in range (99.9%, 100.1%).

  1. At the first time, vestingProfit = 100, vestingPeriod = 10 days and estimatedAPR() returns the correct value.
  2. After 10 days, all vestings are unlocked and there is no locked profit. But accrue() has never been called due to the stable collateral ratio.
  3. In estimatedAPR(), vestingProfit will be 100 and it will return the same APR as 10 days before.
  4. But the APR should be 0 as there is no locked profit now.

estimatedAPR() should return 0 when lockedProfit() == 0.

    function estimatedAPR() external view returns (uint256 apr) {
        if (lockedProfit() == 0) return 0; //check locked profit first

        uint256 currentlyVestingProfit = vestingProfit;
        uint256 weightedAssets = vestingPeriod * totalAssets();
        if (currentlyVestingProfit != 0 && weightedAssets != 0)
            apr = (currentlyVestingProfit * 3600 * 24 * 365 * BASE_18) / weightedAssets;

Picodes (Angle) confirmed and commented:

Valid, although this function isn’t really useful as what matters in the end is how much a call to accrue would give. estimatedAPR should return an approximation of the current APR but is an approximation on the long run

hansfriese (Judge) commented:

@Picodes - It looks like a middle of Medium and Low as it’s a view function. Will keep as Medium because it will be used to estimate the profit rate for users.

Angle mitigated:

Applies the suggested fix.

Status: Mitigation confirmed. Full details in reports from auditor0517 and Jeiwan.

[M-05] uint128 changeAmount might overflow

Submitted by __141345__

This issue is an edge case, that uint128 changeAmount could overflow, making the protocol fail for certain amount of swap.

Proof of Concept

Let’s break down the changeAmount:

  1. amountOut/amountIn
  2. BASE_27
  3. normalizer
File: transmuter/contracts/transmuter/facets/Swapper.sol
176:     function _swap() {

189:                 uint128 changeAmount = (amountOut.mulDiv(BASE_27, ts.normalizer, Math.Rounding.Up)).toUint128();

210:                 uint128 changeAmount = ((amountIn * BASE_27) / ts.normalizer).toUint128();
  1. normalizer

could take value ranging from 1e18 to 1e36, we take the worst case, 1e18.

File: transmuter/contracts/transmuter/facets/Redeemer.sol
193:         if (newNormalizerValue <= BASE_18 || newNormalizerValue >= BASE_36) {

208:             newNormalizerValue = BASE_27;
209:         }
  1. BASE_27 is constant 1e27.
  2. amountOut/amountIn is AgToken with 18 decimals.

Combine the above 1, 2, 3, we have the “total decimal”: 1e18 * 1e27 / 1e18 = 1e27.

The max value of uint128 is 3.4e38. To overflow, the amountOut/amountIn need to be around 3.4e38 / 1e27 = 3.4e11.

For nowadays currencies around the world, we can look at Iranian Rial (IRR). 3.4e11 IRR is around 8M USD. 8M USD is a big amount for now. However considering the following, this concern maybe not nonsense:

  • USD itself is depreciating, from 1970s to now, the gold price(historical chart) has changed from 35 USD/oz to 2000 USD/oz, almost 60 times.
  • Some countries have high inflation rate (Iran, Vietnam, Sierra, Leonean, Lao, etc. That’s how the many zeros in these currencies come).
  • Taking a longer time span of 10-20 years, the depreciation could be influential.

If after 20 years, 3.4e11 of some currency with high inflation depreciates more than 100 times . In that case, the amount is around 80k USD, a reasonable amount to use (especially for institutions).

Although the possibility is low for current use cases, in the future, things could change. To make the stablecoin protocol universal for all countries in the world, the edge case might be some concern.

  • Use uint256 for changeAmount, then the likelihood would be negligible small, making the system more robust to special situations. uint256 wont add too much cost, but can avoid much more potential issue.
  • Use narrower range for normalizer. 1e9 for both up and down direction might be too big, and not necessary.

Picodes (Angle) disagreed with severity and commented:

Although the possibility of overflow is real, I don’t think the scenario is convincing and this likely to happen. Worst case the code is already using safeCast.

hansfriese (Judge) commented:

@Picodes - Will keep it as medium because it’s likely to happen and _swap() will revert during the safeCast.

Angle chose not to mitigate:

We consider that there is no risk here as swaps will be reverting, and that the chances that this happen are infinitesimals.

[M-06] Interest is not accrued before parameters are updated in SavingsVest

Submitted by Jeiwan

Stablecoin holders can receive wrongly calculated yield in the SavingsVest contract. Also, wrong vesting profit can be slashed when the protocol is under-collateralized.

Proof of Concept

The SavingsVest contract lets users deposit their stablecoins and earn vested yield when the stablecoin in the Transmuter protocol is over-collateralized. The interest is accrued via calls to the SavingsVest.accrue function.

There are two parameters that affect the profit of depositors:

  1. protocolSafetyFee is the fees paid to the protocol;
  2. vestingPeriod is the period when the yield remains locked.

The two parameters can be changed via the setParams function. However, before they’re changed, the current interest is not accrued. E.g. this may lead to:

  1. If protocolSafetyFee is increased without accruing interest, the next accrual will happen at the increased fees, which will reduce the rewards for the depositors.
  2. If vestingPeriod is increased without accruing interest, the yield will be locked for a longer period and the next accrual may slash more vested yield.

Thus, users can lose a portion of the yield that was earned at a lower protocol fee after the fee was increased. Likewise, increasing the vesting period may result in slashing yield that was earned before the period was increased.

In the SavingsVest.setParams function, consider accruing interest with the current parameters before setting new protocolSafetyFee and vestingPeriod.

Picodes (Angle) confirmed and commented:

Confirmed. The worst scenario is that when modifying the vestingPeriod it can lead to a jump in lockedProfit, so to a jump in totalAssets(). So eventually someone could sandwich attack the update for a profit.

Angle mitigated:

Calls `accrues before updating sensible parameters.

Status: Mitigation confirmed. Full details in report from Jeiwan.

[M-07] User may get less tokens than expected when collateral list order changes

Submitted by Lambda

The order of ts.collateralList is not stable: Whenever LibSetters.revokeCollateral is used to revoke a collateral, it may change because of the swap that is performed. However, the function Redeemer.redeem relies on this order, as the user has to provide the minAmountsOut in the order of ts.collateralList. This can lead to situations where the user has crafted the minAmountsOut array when the order was still different, leading to unintended results (and potentially redemptions that the user did not want to accept). It also means that revoking a collateral can be challenging for the team / governance because it should never be done when a user has already prepared a redemption (either via the frontend which he had open or some other way to interact with the contract). But there is of course no way to know this.

Proof of Concept

Let’s say the system contains the collateral [tokenA, tokenB, tokenC]. normalizedStables for tokenA is 0. The user therefore does not want to receive tokenA (and will not receive anything for it). However, it is extremely important to him that he receives 100,000 of tokenC. He therefore crafts a minAmountsOut of [0, 10000, 100000]. Just before he submits the call, tokenA is removed from the system, resulting in the collateral array [tokenC, tokenB]. Even if the user only receives 50,000 tokens of tokenC, the call will therefore succeed.

The problem could be alleviated a bit by checking the length of minAmountsOut (making sure it is not longer than ts.collateralList). However, that would not help if a collateral is revoked and a new one is added. Another solution would be to provide pairs of token addresses and amounts, which would solve the problem completely.

Picodes (Angle) confirmed and commented:

The mitigation doesn’t cost much and we will implement it. It’s really an edge case though.

Angle mitigated:

Applies the suggested fix.

Status: Not fully mitigated. Full details in reports from Lambda and auditor0517.

Low Risk and Non-Critical Issues

For this audit, 4 reports were submitted by wardens detailing low risk and non-critical issues. The report highlighted below by Lambda received the top score from the judge.

The following wardens also submitted reports: Udsen, auditor0517, and Jeiwan .

[L-01] DiamondProxy License

DiamondProxy is a fork of, but has changed the license from MIT to CC0-1.0. While this should be no problem legally (as far as I know), there is no reason to change the license in my opinion.

[L-02] Nested Loop in Redeemer._redeem

The function _redeem iterates over all tokens. Moreover, the check LibHelpers.checkList(tokens[i], forfeitTokens) (which is linear in the length of forfeitTokens) is performed within loop iteration. Therefore if there are $n$ tokens and $m$ tokens to be forfeited, the overall complexity will be $O(n*m)$. This can be very expensive depending on the values of $n$ and $m$. As an alternative, the forfeited tokens could be stored in a mapping in the beginning and this mapping could be queried (constant complexity) within each iteration.

[L-03] (Temporary) manipulations of IManager.totalAssets() would break the system

One potential attack vector for the system is (temporarily) manipulating the return value of IManager.totalAssets(). Depending on how the strategies are implemented, it may be possible to inflate their values, for instance by using flash loans and temporarily depositing / withdrawing. Because no strategies were in-scope, it is not possible to judge if this is currently possible, but it is something to keep in mind (and potentially document) when building strategies.

[L-04] Third Order Taylor Approximation can be imprecise

The Savings contract uses a third-order taylor approximation for approximating $(1 + i)^n$ (i.e., continuous compounding). However, this can be imprecise for large value of $ni$. For instance, consider the difference when the assets are 10,000, $i = 0.01$ , $n = 10$:

10000*(1.01)^{10} - 10000*(1+0.01*10+10*9*0.01^2/2+10*9*8*0.01^3/6) = 0.02

Now, consider the difference for $i = 0.000001$ and $n=864000$ (one week when $n$ denotes seconds):

10000*(1 + 0.000001)^{864000} - 10000*(1+0.000001*864000+864000*863999*0.000001^2/2+864000*863999*863998*0.000001^3/6) = 278.2

An alternative would be to use a library (which usually contains higher-order terms) for the exponentiation.

[L-05] Grifting possibilities for strategies

LibSetters.revokeCollateral performs the following check for managed collateral:

(, uint256 totalValue) = LibManager.totalAssets(collatInfo.managerData.config);
if (totalValue > 0) revert ManagerHasAssets();

Depending on the strategy used, there may be ways where another user can increase totalAssets (e.g., donating 1 wei), making the removal of a collateral impossible.

[L-06] Collateral may not be revokable because of rounding

LibSetters.revokeCollateral performs the following check:

if (collatInfo.decimals == 0 || collatInfo.normalizedStables > 0) revert NotCollateral();

However, because of the rounding within _swap, it can happen that normalizedStables is a very small value (e.g., 1 wei) and it is not possible to decrease it further.

[L-07] Swapper assumes 18 decimals for the stable coin

The Swapper contract assumes in multiple places that the stable coin contract has 18 decimals (e.g., here). While this is true for AgToken’s, the system is intended to be general and usable with other underlying stablecoins according to the whitepaper. Therefore, making this configurable would make sense in my opinion.

[N-01] RewardHandler.sellRewards requires trust in seller

There is a check within RewardHandler.sellRewards to confirm that the balance of collateral assets has increased. However, this check does not change the fact that trust in the seller is required. A malicious seller could still craft an order with huge slippage that sells tokens at a very poor rate and only increases collateral slightly. An alternative would be to construct the 1inch payload dynamically instead of relying on the user to provide it.

[N-02] Reliance on decimals()

LibSetters.addCollateral queries decimals() and therefore relies on the fact that tokens implement this function. While this is not guaranteed and generally against EIP 20 (“OPTIONAL - This method can be used to improve usability, but interfaces and other contracts MUST NOT expect these values to be present.”), it should not be a huge problem in practice because most ERC20 tokens implement the functions. Nevertheless, because the collateral is provided by the user anyways, an (optional) alternative would be to let him also provide the decimals.

[N-03] System may use prices that never existed

Becuase combines multiple Chainlink feeds with a different timestamp, it may use a price for an asset that has never existed (when it multiplies prices with timestamp $X$ and $Y$). This has for instance happened to Y2K in the past. It is quite hard to avoid (one could keep multiple prices and try to find a “closest match” based on the history, but this is also not perfect), but something to keep in mind.

Status: See Mitigation Review section below for details regarding mitigations related to low and non-critical issues.

Gas Optimizations

For this audit, 2 reports were submitted by wardens detailing gas optimizations. The report highlighted below by Udsen received the top score from the judge.

The following warden also submitted a report: auditor0517.

[G-01] Unused variables can be omitted

In the LibOracle.getBurnOracle() function, declares the uint256 oracleValueTmp memory variable and later initializes it as follows by calling the readBurn function:

    (oracleValueTmp, ratioObserved) = readBurn(ts.collaterals[collateralList[i]].oracleConfig);

But the oracleValueTmp variable is never used within the scope of the function and is used only as a place holder. Hene we can omit this variable and save extra MSTORE for each iteration of the for loop. Hence the gas saved will be equal to 3 * collateralList.length; As a result if the list of collateral assets supported by this system is higher this will save considerable amount of gas.

The line of code can be edited as follows:

    ( , ratioObserved) = readBurn(ts.collaterals[collateralList[i]].oracleConfig);

[G-02] storage variable can be replaced with calldata variable

In the Swapper._buildPermitTransferPayload the Collateral struct is passed into the function as a storage variable named collatInfo. But it is only read from and not written to within the scope of the function implementation. Hence it is recommended to make the collatInfo a calldata variable and read from calldata instead, to save on two extra SLOAD operations for the transaction.

[G-03] Redundant checks can be omitted

In the Swapper.swapExactOutputWithPermit() function performs a check to verify that the amountIn is less than the amountInMax amount as follows:

    if (amountIn > amountInMax) revert TooBigAmountIn(); 

But this is a redundant check since the same check is performed as shown below, in the SignatureTransfer.sol contract which is a parent contract of Permit2.sol contract. This is called inside the Swapper._swap() function.

    if (requestedAmount > permit.permitted.amount) revert InvalidAmount(permit.permitted.amount);

Hence the redundant call inside the Swapper.swapExactOutputWithPermit() function can be omitted to save gas.

[G-04] Conditional check can be performed during variable initialization

In the DistributionCreator._createDistribution() function the userFeeRebate value is used when calculating the distributionAmountMinusFees if the UniswapV3Pool tokens are not whitelisted. Before the distributionAmountMinusFees calculatation, there is a check inside the if statement as follows:

userFeeRebate < BASE_9

This check makes sure that the distributionAmountMinusFees will only be calculated if the userFeeRebate < BASE_9.

But it is recommended to check whether userFeeRebate < BASE_9 in the DistributionCreator.setUserFeeRebate function when setting the feeRebate[user] = userFeeRebate. By doing this we can omit the userFeeRebate < BASE_9 check in the DistributionCreator._createDistribution() and also we can prevent setting the feeRebate[user] value as invalid ( > BASE_9) value thus saving a SSTORE as well.

The suggested code snippet change is as follows:

function setUserFeeRebate(address user, uint256 userFeeRebate) external onlyGovernorOrGuardian {
    require(userFeeRebate < BASE_9, "Invalid userFeeRebate");
    feeRebate[user] = userFeeRebate;
    emit FeeRebateUpdated(user, userFeeRebate);

[G-05] uint256 variable initialization to default value of 0 can be omitted

There is no need to initialize variables to their default values during declaration, since they are any way initialized to default value once declared.

[G-06] Arithmatic operations can be unchecked, since there is no underflow or overflow

In the DistributionCreator.toggleTokenWhitelist function implementation can be unchecked to save gas.

This function is used to toggle the value of isWhitelistedToken[token] between 0 adn 1. Hence the arithematic operation can never underflow or overflow. Hence the DistributionCreator.toggleTokenWhitelist function can be updated as follows with the unchecked keyword.

function toggleTokenWhitelist(address token) external onlyGovernorOrGuardian {
        uint256 toggleStatus = 1 - isWhitelistedToken[token];
        isWhitelistedToken[token] = toggleStatus;
    emit TokenWhitelistToggled(token, toggleStatus);

In the SavingsVest.accrue() function, when the protocol is under-collateralized and the missing <= currentLockedProfit the vesting profit updated as follows:

        } else {
            vestingProfit = currentLockedProfit - missing;
            lastUpdate = uint64(block.timestamp);

This arithmetic operation can be unchecked due to previous check of if (missing > currentLockedProfit).

Hence the above code snippet can be modified as follows:

        } else {
                vestingProfit = currentLockedProfit - missing;
                lastUpdate = uint64(block.timestamp);

Status: See Mitigation Review section below for details regarding mitigations related to gas optimizations.

Audit Analysis

For this audit, 2 analysis reports were submitted by wardens. An analysis report examines the codebase as a whole, providing observations and advice on such topics as architecture, mechanism, or approach. The report highlighted below by __141345__ received the top score from the judge.

The following wardens also submitted reports: auditor0517 and Lambda.


Composability is a huge advantage of DeFi, on the other side, it also could be a double sword. Considering Angle can work with other stablecoin system, and the sub-collateral is also introduced, the inter dependency could go quite complex later on. Some troublesome situation could be like: stableA use stableB as collateral, stableB use stableC as collateral, stableC again use stableA as collateral, ABC form a cycled collateral. If the cycle involves tens of tokens, it could be hard to spot the issue. But in the time of crisis, such inter dependent system will break quickly.

The idea of sub-collateral can help to expand the available assets for the protocol. On the other hand, more attention will be needed with regards to uncontrollable external contracts. It may need special attention, such as:

  • the sub-collateral changed the constitution (such as DAI and FRAX could change the backed assets).
  • it may further has sub-sub-collateral.
  • there is locked time period of the sub-collateral, such as notional fixed rate bond token, maybe 6 month to expiry.

The same principal applies to other parts of the contract. Overall, the protocol works great in terms of modular implementation, by which I mean the Angle system has sub-modules, acting like LEGO. One developing suggestion might be not go too far in the compatibility with other protocols, just like the sub-collateral, maybe one layer of integration is good enough, but not too much.

Penalty Factor and Depeg Handling

The main suggestion is to add some kind of downside protection as last resort. Below is the reason.

The penalty factor can deter users from bank run, this is a clever design. But depending on the severity of the situation, the outcome might be quite different. Let’s divide the users into 2 groups: “run” and “stay”, and compare the 2 past big events: USDC and luna.

  1. USDC
    It depegged to 0.87 and recovered afterwards. The penalty rule will work great. The “run” group will be penalized and the “stay” group will be rewarded. The most important is, USDC recovered at last.
  2. luna
    It just went down to zero. At the end, everyone loses. At the beginning, the “run” group would be discouraged to exit. In the end, they ended up losing more because missing the earlier exit stop loss opportunity.

My understanding of some main stream stable coin is, it should stay pegged, or just go zero and exit. It’s hard to imagine USDC valued at $0.65 after market rally (even if the loss is too big, the admin might try to burn some of the supply to recover the price, otherwise it has nothing to do with USD). Hence, the penalty factor rule can work great in the first situation with recover, but not for collapse case. When depeg comes, the protocol will hope no one get panic and bank run, but can not assure that everything is ok if staying. It will become a difficult trade off for users.

To deal with the worst situation, some protect such as insurance can be added. With the downside protection as last resort, users wont worry that much to join the “stay” group. Worst case, if this stable coin goes to zero, they know they are still covered anyway. The last protection could act as a patch for the penalty rule.

There are some defi insurance providers, for example unslashed, nexusmutual, insurace, bridgemutual. As for the choice of this kind of protection, the cheapest tier can be used, since the collapse situation is some extremely low possible black swan. The alternative could be put option, however the choice could be limited, and the cost might be higher.

One more thing, for such kind of insurance, if try to protect USDC, the payout should not be in USDC. Because if USDC goes to 0, it it pointless to receive huge payout still in USDC.

Mitigation Review


Following the C4 audit, 3 wardens (Lambda, auditor0517, and Jeiwan) reviewed the mitigations for all identified issues. Additional details can be found within the C4 Angle Protocol Mitigation Review repository.

Overview of Changes

Summary from the Sponsor:

Changes related to High and Medium issues on Merkl can be found here.

Changes that we intend to make on Merkl prior to final deployment, so including QA and GAS can be found here. Updated tests and scripts are on the main branch.

Changes related to High and Medium issues on Transmuter can be found here.

Changes that we intend to make on Transmuter prior to final deployment, so including QA and GAS can be found can be found here. Updated tests and scripts are on the main branch.

Mitigation Review Scope

URL Mitigation of Purpose H-01 Adds a reentrancy guard to several functions H-02 Applies the suggested fix H-03 Applies the suggested fix M-01 Add a handler for this edge case M-02 Adds safeCast M-03 Adds a reentrancy guard to several functions M-04 Applies the suggested fix M-06 Calls accrues before updating sensible parameters M-07 Applies the suggested fix QA & GAS QA & GAS

Mitigation Review Summary

Original Issue Status Full Details
H-01 Mitigation Confirmed Reports from auditor0517, Lambda, and Jeiwan
H-02 Mitigation Confirmed Reports from Lambda, auditor0517, and Jeiwan
H-03 Mitigation Confirmed Reports from Lambda, auditor0517, and Jeiwan
M-01 Mitigation Confirmed Reports from Lambda, auditor0517, and Jeiwan
M-02 Mitigation Error Reports from Lambda, auditor0517, and Jeiwan
M-03 Mitigation Confirmed Reports from Lambda, auditor0517, and Jeiwan
M-04 Mitigation Confirmed Reports from auditor0517 and Jeiwan
M-06 Mitigation Confirmed Report from Jeiwan
M-07 Not Fully Mitigated Reports from Lambda and auditor0517
QA Mitigation Confirmed Reports from auditor0517 and Lambda
Gas Mitigation Confirmed Reports from auditor0517 and Lambda

The wardens determined that one Medium severity finding was not fully mitigated. They also surfaced one mitigation error of Medium severity. See below for full details on both.

M-02 Mitigation Error: Attacker can brick redemptions by donating a small amount

Submitted by Lambda, also found by auditor0517 and Jeiwan

While the fix properly fixes the issue of collateralization ratio overflows (that can no longer occurs), it enables DoS attacks on the redemption mechanism:

Issue description

Consider the example that was already provided ( ), where an attacker produces an overflow by donating a small amount:

Let’s take an extreme example and say that stablecoinsIssued is 1 (although the attack also works with larger values). If a user now transfer 1 USD of a stablecoin to the contract, totalCollateralization will be roughly 10**18. Therefore, the system calculates:

collatRatio = uint64(10**18 * 10**9 / 1) = uint64(10**27);

Because 10**27 > type(uint64).max, this overflows.

After the fix, any call to getCollateralRatio will revert because of the SafeCast. Therefore, any call to _quoteRedemptionCurve will also revert, meaning that redemptions fail.

Note that the attacker never directly interacted with the contract (as he donated the tokens), which means that the protection also does not work.


It is recommended to set collatRatio to type(uint64).max instead of reverting when an overflow happens. Then, the problem would no longer occur.

sogipec (Angle) commented:

This is indeed a valid remark. That being said, I don’t think we’ll adjust the code for this one, and we still prefer the function to revert if the collateral ratio overflows, as we hardly see a case where anyone would redeem in such a situation (gas cost on Ethereum far greater than the amount that can be redeemed given the low amount of stablecoinsIssued for it to happen). We’ll try to put a comment to encourage initialization of Transmuter with a non null stablecoinsIssued amount (like >1, but closer to 10€ worth of stablecoins) so this makes this DoS attack economically impossible.

M-07 Unmitigated

Submitted by Lambda, also found by auditor0517

The fix addresses the scenarios when collaterals are removed between the crafting of the minAmountsOut list and the submission of the transaction. Then, we will have amounts.length > minAmountOuts.length, meaning that the following line causes a revert:

        if (amountsLength != minAmountOuts.length) revert InvalidLengths();

However, as mentioned in the issue, only checking the length does not mitigate the issue fully. If one collateral is removed and another one added, it still exists. For instance, we could have:

  • Initial collateral list [A, B, C, D]. This is used by the user to craft minAmountOuts
  • Then, collateral A is removed, resulting in [D, B, C].
  • Then, a new collateral Z is added, resulting in [D, B, C, Z].

We have amountsLength == minAmountOuts.length, therefore the transaction does not revert. However, the minAmount that the user passed in for A is now applied to the redemption of D.

To be fair, this scenario is extremely unlikely, but I would still say that the issue is technically not fixed completely.

sogipec (Angle) commented:

Thanks for raising this! We should have put a comment to show that we’re aware of the fact that the issue is not technically and completely fixed. We’re not going to add any additional code to fix it though, given the unlikeliness and the gas overhead it’d induce.


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C4s audits incentivize the discovery of exploits, vulnerabilities, and bugs in smart contracts. Security researchers are rewarded at an increasing rate for finding higher-risk issues. Audit submissions are judged by a knowledgeable security researcher and solidity developer and disclosed to sponsoring developers. C4 does not conduct formal verification regarding the provided code but instead provides final verification.

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