Manual Review

A thorough line-by-line review was conducted on the codebase to identify potential malfunctions and vulnerabilities in PowerCity's Liquity fork.

As the project at hand implements an algorithmic stablecoin system, intricate care was put into ensuring that the flow of funds within the system conforms to the specifications and restrictions laid forth within the protocol's specification.

We validated that all state transitions of the system occur within sane criteria and that all rudimentary formulas within the system execute as expected. We pinpointed two significant errors within the system's recovery mode calculations which could have had severe ramifications to its overall operation.

Additionally, the system was investigated for any other commonly present attack vectors such as re-entrancy attacks, mathematical truncations, logical flaws and ERC / EIP standard inconsistencies. The documentation of the project was satisfactory to a certain extent, however, we strongly recommend it to be expanded at certain complex points such as the relocated and refactored debt checks in the BorrowerOperations::_adjustTrove function flow.

A total of 13 findings were identified over the course of the manual review of which 3 findings concerned the behaviour and security of the system. The non-security related findings, such as optimizations, are included in the separate Code Style chapter.

The finding table below enumerates all these security / behavioural findings:

ID	Severity	Addressed	Title
BOS-01M			Inexistent Validation of Valid Repayment
LUS-01M			Insecure Elliptic Curve Recovery Mechanism
TMR-01M			Incorrect Update of Aggregate Trackers in Recovery Mode