Michi Protocol

Smart Contract Audit Report

Executive Summary

This report presents the outcomes of our collaborative engagement with the Michi Protocol team, focusing on the comprehensive evaluation of the MichiHelper and MichiWalletNFT contracts.

Our team conducted an initial security assessment from March 18th to March 20th, 2024. On March 22nd, our team amended this report to reflect changes made to the contracts to resolve the findings we had identified during our initial review from commit 91d0693 to commit 51260f5.

Michi Protocol allows users to mint NFTs and add them to an ERC-6551 Registry. An ERC-6551 Registry creates an account bound to a minted NFT. This allows the account owner to execute arbitrary logic related to the NFT. Some potential use cases include allowing an account owner to maintain various token assets associated with the NFT, the NFT holder maintaining additional NFTs such as in a WEB3 based game, and many other possible use cases.

Audit Scope

Audit Findings

All findings have been resolved, though some centralized aspects are present.

function createWallet(uint256 quantity) external payable {
	for (uint256 i = 0; i < quantity; i++) {
		uint256 currentIndex = michiWalletNFT.getCurrentIndex();
		michiWalletNFT.mint{value: msg.value}(msg.sender);
		...
	}
}

function mint(address to) external payable {
	if (msg.value != mintPrice) revert InvalidPayableAmount(msg.value);
	...
}

System Overview

The MichiHelper contract is used to mint MICHI NFTs and register them in an ERC-6551 Registry contract. Any user may mint any amount of NFTs by paying the mint fee for each NFT minted. The owner may set the mint price to any value at any time. The Registry creates an account bound to the NFT and allows the account to execute arbitrary logic. However, the Registry contract is outside the scope of this logic so we are unable to give an assessment in regard to security.

Users may also use this contract to deposit tokens into the account associated with an NFT. A fee is taken and sent to the FeeReceiver address if the takeFee parameter is true. The tokens that may be deposited is intended to be limited to approved tokens, however due to logical issues users may deposit any token.

Vulnerability Analysis

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What is a SourceHat Audit?

Typically, a smart contract audit is a comprehensive review process designed to discover logical errors, security vulnerabilities, and optimization opportunities within code. A SourceHat Audit takes this a step further by verifying economic logic to ensure the stability of smart contracts and highlighting privileged functionality to create a report that is easy to understand for developers and community members alike.

How Do I Interpret the Findings?

Each of our Findings will be labeled with a Severity level. We always recommend the team resolve High, Medium, and Low severity findings prior to deploying the code to the mainnet. Here is a breakdown on what each Severity level means for the project:

• High severity indicates that the issue puts a large number of users' funds at risk and has a high probability of exploitation, or the smart contract contains serious logical issues which can prevent the code from operating as intended.
• Medium severity issues are those which place at least some users' funds at risk and has a medium to high probability of exploitation.
• Low severity issues have a relatively minor risk association; these issues have a low probability of occurring or may have a minimal impact.
• Informational issues pose no immediate risk, but inform the project team of opportunities for gas optimizations and following smart contract security best practices.

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