Divergence smart contract audit by ChainSecurity

Divergence Protocol v1c

Security Audit

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Summary

The most critical subjects covered in our audit are functional correctness, solvency of battles, and access control. Security regarding all aforementioned subjects is satisfactory.

The general subjects covered are rounding errors, denial-of-service, documentation and gas efficiency. The security regarding rounding errors is satisfactory, while the security regarding denial-of-service is improvable (see Battles With Malicious Starting Prices). The codebase could be improved regarding gas efficiency (see Gas Optimizations). The documentation and inline code specification can also be improved.

We thank the Tenet Technology Ltd team for always being responsive and very professional during this engagement.

In summary, we find that the codebase provides a satisfactory level of security.

It is important to note that security audits are time-boxed and cannot uncover all vulnerabilities. They complement but don’t replace other vital measures to secure a project.

About Divergence Protocol v1c

Tenet Technology Ltd implements an Automated Market Maker(AMM) for digital options. In this system, liquidity providers (LPs) provide liquidity at their positions of interest. Afterwards, traders can buy put or call digital options to take a position whether the price of an underlying asset exceeds the strike price at maturity or not. LPs collect the option premiums and fees paid by traders.

“Divergence v1 is a novel noncustodial automated market maker for options with a predetermined payoff structure. It enables access to an extensive selection of options pools, each with a distinct underlying asset, strike price, maturity, and collateral token. The decentralized protocol facilitates on-chain peer-to-pool swaps of options tokens, with minimal friction, enhanced capital efficiency, and low transaction costs. Its model-free pricing approach empowers individual users to flexibly price and tailor options exposure.”

Source: https://www.divergence-protocol.com/diver_v1AMM_paper.pdf

ChainSecurity scrutinized our multiple iterations, with impressive sophistication and attention to detail. Their talented team meticulously dissected our very complex mechanism and code architecture. Their insightful analysis helps us immensely. A real pleasure to work with, and we look forward to continuing engagements.
Lianne Li, Divergence Founding Member