Formal Analysis of Composable DeFi Protocols

• DOI: 10.48550/arxiv.2103.00540
• Publication Date: 2021-01-01
• Authors: Palina Tolmach; Yi Li; Shang‐Wei Lin; Yang Liu
• Keywords: FOS: Computer and information sciences; Computer Science - Cryptography and Security; 0202 electrical engineering, electronic engineering, information engineering; 02 engineering and technology; Cryptography and Security (cs.CR)

Decentralized finance (DeFi) has become one of the most successful applications blockchain and smart contracts. The DeFi ecosystem enables a wide range crypto-financial activities, while underlying contracts often contain bugs, with many vulnerabilities arising from unforeseen consequences composing protocols together. In this paper, we propose formal process-algebraic technique that models in compositional manner to allow for efficient property verification. We also conduct case study demonstrate proposed approach analyzing composition two interacting protocols, namely, Curve Compound. Finally, discuss how modeling verification can be used analyze financial security properties interest.