Maker Protocol – Liquidations 2.0 Security Audit

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Summary

The Maker protocol – Liquidations 2.0 smart contracts have been audited by ChainSecurity.

Liquidations 2.0 for multi collateral DAI has been developed to mitigate uncovered shortcomings in the previous liquidation system. The most notable change from the previous version is the move from English to Dutch style auctions. The resulting single block composability allows anyone to participate in the liquidation without capital constraints by leveraging flash-loans. Contrary to the old system, partial liquidations no longer exists except under special circumstances. Keepers, responsible to initiate the liquidation of undercollateralized vaults have no first mover advantage anymore in the auction, hence a new incentive scheme has been introduced.

ChainSecurity uncovered 4 medium severity and 6 low severity findings, all of which have been addressed by Maker.

About Maker Protocol – Liquidations 2.0

The Maker Foundation is tasked with bootstrapping MakerDAO to fuel growth and drive the organization toward complete decentralization. While the Foundation provided development support through the launch of Multi-Collateral Dai (MCD), it is currently spearheading efforts to decentralize development. MakerDAO governs the Maker Protocol by deciding on key parameters (ie. stability fees, collateral types and rates) through the voting power of MKR holders holders.

ChainSecurity went above and beyond our expectations when it came to the audit of our Liquidations 2.0 upgrade of the MakerDAO Protocol.

They were the perfect partner to support the biggest upgrade of the protocol since its launch.
Wouter Kampmann, Head of Engineering (Maker Foundation)