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Smart Contract Security Field Guide

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Re: Smart Contract Security Field Guide

#111

Post by simpsond »

hn_throwaway_99 wrote: post #39
mteigers wrote: post #35

Earlier quoted context omitted.

I have no direct affiliation with this service (nor am I a user of it) but I recently learned about "Pool Together" which is a "lossless" lottery system. It's a daily lottery that happens automatically, you do not need to collect as it happens automatically, and you can withdraw all of your capital at any time. I thought that was a decently novel use case.

First off, wanted to say thanks very much for posting this, primarily because I think it is an example that is straightforward and easy to understand. That said, I'm also thinking "if this is one of the best, straightforward examples people are talking about when referring to 'the value of smart contracts', then smart contracts are just nowhere near the important tech its boosters believe." (To be clear mteigers, not…

PoolTogether routes deposited funds to a liquidity pool on aave. Those funds can be lended out via over-collateralized loans. That’s how the interest is earned. They could of course use other types of pools and gain funds on swap fees etc.

Re: Smart Contract Security Field Guide

#112

Post by hn_throwaway_99 »

alexslobodnik wrote: post #95
duxup wrote: post #27

Can someone give me a good use case (even better if you're doing it yourself) for a smart contract? What is anyone doing with them that they find really handy? I've never been able to understand how it gets used / why you would use smart contracts. I've googled and read... still don't grok it. I've seen so many "benefits" listed, but none make sense to me as far as the process you go through and how it works out in t…

Ethereum name service, more commonly known as ENS. In ethereum address appear like 0x233eb...042, ENS let's you associate a human readable name like nick.eth with that address. Works similar to DNS, turning IP addresses into something we humans recognize. What's the pro of using a smart contract? (DNS works without one). With a smart contract you can have immutable data store (assuming ethereum continues) that can gi…

I posted the sibling comment basically dumping on smart contracts, so I wanted to thank you very much for posting this - it helped me understand smart contracts better in my mind and helped crystallize places where they could be useful.

I knew vaguely about ENS (primarily just by seeing .eth addresses), but your comment led me to dig in to how it works. I think the bit of "eureka" moment I had is that smart contracts are really only useful for shuffling around ownership of "pure data", and then it's up to everyone else to interpret what that data actually means.

That is, for an eth name, it's really just storing an association of the name with another piece of data, and putting a mechanism in place for who gets to control that association (i.e. how bidding for a name works). It's then up to other people to decide how (or whether) they want to "interpret" that association. In my mind it's quite similar to NFTs. All NFTs really store is an association that says "this person 'owns' this other piece of data called X, and that other piece of data X actually refers to this shitty digital image of a bored ape." But, of course anyone else can copy the bits of that shitty digital image and do whatever they want with it - it's only if enough people agree that "yes, that NFT really does mean that shitty digital image" for it to be worth anything.

It also helped me because with most contracts people think about how "things in the real world" need to be verified in order to determine contract performance (did the price of wheat go up, was the vacation rental as advertised), but smart contracts really are quite useless in those examples. But there are some examples where you're just storing pieces of data and you do not care about what happens "in the real world". Thus, I still feel smart contracts are often greatly oversold (and often misunderstood) by their boosters, but there are specific "data-mapping" use cases where they make sense. I also appreciate that you pointed out the downsides of not having a mediation process, which I think many crypto boosters think of as a feature but many people feel is a bug in the real world.

Anyway, you really helped me think about this more clearly, and I appreciate it.

Re: Smart Contract Security Field Guide

#113

Post by photonthug »

hn_throwaway_99 wrote: post #102
photonthug wrote: post #97

Earlier quoted context omitted.

> More than just needing an oracle - the keys and the house are both physical items. There's not really any practical way for a contract on the blockchain to validate that a particular physical item is in fact the item Responding to you but this applies to lots of stuff in this thread. Quoting wikipedia, "a smart contract is a computer program or a transaction protocol that is intended to automatically execute, contr…

> How can anyone possibly object to this technology as if it were a) impossible or b) useless? Because it doesn't work, nor do I believe it ever really can work, at least as it's largely advertised. I mean, you just read the description from Wikipedia and are basically saying "How can people object to this idea?" That's like reading about all the great things flying cars can do and then saying "How can anyone object…

Final will and testament: When I'm dead, move all the money from account A into account B. What is "not feasible" about a government API that answers whether a citizen is alive and a banking API that runs a funds transfer? Let's stick the code for this in some large cloud provider where it checks the credentials and conditions involved every minute.

We could debate whether this is a cheaper/easier/safer approach than trusting a law firm/banks/clergy/clerks to execute things on your behalf. But it's absurd to say that this is not possible (because every part of this is already done), or that it is not useful (it has exactly the same use-case as a classic will, but moves trust from a law firm to a cloud provider).

Re: Smart Contract Security Field Guide

#114

Post by hn_throwaway_99 »

photonthug wrote: post #113
hn_throwaway_99 wrote: post #102

Earlier quoted context omitted.

> How can anyone possibly object to this technology as if it were a) impossible or b) useless? Because it doesn't work, nor do I believe it ever really can work, at least as it's largely advertised. I mean, you just read the description from Wikipedia and are basically saying "How can people object to this idea?" That's like reading about all the great things flying cars can do and then saying "How can anyone object…

Final will and testament: When I'm dead, move all the money from account A into account B. What is "not feasible" about a government API that answers whether a citizen is alive and a banking API that runs a funds transfer? Let's stick the code for this in some large cloud provider where it checks the credentials and conditions involved every minute. We could debate whether this is a cheaper/easier/safer approach than…

Because what you are describing is not a smart contract, at least how it is nearly always commonly understood.

What you are describing is simple API automation. Nobody describes what IFTTT or Zapier can do as a smart contract, yet that is literally exactly what you have described.

Re: Smart Contract Security Field Guide

#115

Post by kaycey2022 »

duxup wrote: post #27

Can someone give me a good use case (even better if you're doing it yourself) for a smart contract? What is anyone doing with them that they find really handy? I've never been able to understand how it gets used / why you would use smart contracts. I've googled and read... still don't grok it. I've seen so many "benefits" listed, but none make sense to me as far as the process you go through and how it works out in t…

From my understanding a smart contract is like a web backend, with completely transparent business logic and data, so anyone can interact with it without any intermediary. If you can deploy your program (smart contract) on the ethereum blockchain or any of the L2 chains, then all the costs of interacting with it and maintaining its data layer are borne by the market participants.

Because of these properties you can create entirely open market infrastructure that anyone can use, which means reduced compliance costs (measured in opportunity and not money) and regulations for the participants.

On the flip side, the issue is that most people are stupid, don't know shit about what they are doing, and the tech itself is vulnerable to all sorts of race conditions because of flaws in Solidity language and the EVM itself which can enable hacks.

I am personally very sympathetic to the crypto efforts and not as sympathetic with the skeptics, because I find the centralisation of the web by some American players to be more dangerous than some individuals losing their life savings playing on web3.

Re: Smart Contract Security Field Guide

#116

Post by TimJRobinson »

greiskul wrote: post #21
pcthrowaway wrote: post #9

Earlier quoted context omitted.

As a dark-hat in the space you'd have a pretty good chance of being caught by chainalysis eventually. Meanwhile there are still hundreds of millions of dollars of bounties available for white-hats who responsibly disclose. The dark-hat hackers who aren't held responsible are likely in either Russia or North Korea

It's amazing how quickly code-is-law becomes regular law is law when the code allows all your money to be stolen. And that is the nail in the coffin of this ideology, proponents of blockchain claim one day your house deed will be on the blockchain. What happens when people hack your house away from you then?

The only people that think code is law are hardcore libertarians / anarchists, which was the majority of crypto in 2011 but obviously isn't now.

The most likely way houses and other real world assets will exist is via a 2/3 multisig on the tokens. The 3 participants being: Government, Management Company, User.

If you lose your keys or get hacked you can go to the government + company responsible for the assets and get them back. If the company screws up the users can work with the government to get their assets back.

The advantage of this over a traditional government database is transfers can be made much more efficient because the government doesn't have to be involved in every transfer, they only step in if things go wrong.

Re: Smart Contract Security Field Guide

#117

Post by TimJRobinson »

liveoneggs wrote: post #26
iramiller wrote: post #17

Earlier quoted context omitted.

Doing crime on a system with a perfect immutable record doesn’t seem like a smart play to me. As noted above the firms like chainalysis will continue to uncover and attribute all of the nodes in the graph. If you are taking 100s of thousands or more through fraud the incentives are aligned to see your crimes prosecuted.

is it a crime if the smart contract acts as coded, but not necessarily as intended?

Yes. There are those who claimed they just performed a "highly profitable trading strategy", and are now sitting in jail.

Re: Smart Contract Security Field Guide

#118

Post by notacoward »

jeffbee wrote: post #77
samuellevy wrote: post #68

Earlier quoted context omitted.

More than just needing an oracle - the keys and the house are both physical items. There's not really any practical way for a contract on the blockchain to validate that a particular physical item is in fact the item that it purports to be. Are these ACTUALLY the keys to this house? Are they the only set? The original set? Were the locks changed, and this set in the contract is no longer valid? Then putting aside all…

Thinking of a real estate transaction as an exchange of physical things is already a mistake. Most people expect to take possession of a structure in most deals, but it is sort of beside the point. What you're trading is a legal filing where you go to the county recorder (most states) and just claim to own something. What are you really buying? The promise from the other guy that they won't claim to own it in the fut…

> All kinds of people could have claims on it.

That is not necessarily true. Often, one or more of the closing documents addresses this very issue, attesting that there are no such known claims and/or assigning any unknown ones to you as the new owner. Liability is part of ownership, after all, and all ownership is "just a legal filing" unless it's backed by force. While it's true that a real estate transaction is not the same as a transfer of a physical thing, dismissing such transactions as fictional is a bit sophist.

Re: Smart Contract Security Field Guide

#120

Post by kaycey2022 »

sunshine-o wrote: post #25
jjordan wrote: post #16

Earlier quoted context omitted.

There is a thriving community of security researchers and engineers in the smart contract auditing space. Services like code4rena ( https://code4rena.com/ ) and sherlock ( https://www.sherlock.xyz/ ) make audits a public and competitive process with leaderboards that track the best of the best. Naturally those that rise to the top of these leaderboards tend to end up offering boutique auditing services due to project…

Yes but as you see on code4rena the cost of an audit is about $100k. What is ballpark what a company would pay to have a security audit of their website or network for example. So I would guess Ethereum has become an "Enterprise" technology because of the prohibitive cost of security of its applications? From what understood originally, blockchain & Ethereum aimed removing those actors like banks who can afford high…

But none of the players involved are "landlords". The 100k etc is just the figure they are charging for their services. It isn't mandatory that you get a security audit. You can just go ahead without it.

Whereas if you want to get those conventional licenses you have to go through mandatory licensing. This means there is unlikely to be a regulatory capture that would introduce licensing terms that would prohibit new players from coming in.

That is objectively a good thing.

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