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Polymath Core Audit


CoinFabrik was asked to audit the contracts for the Polymath project. Firstly, we will provide a summary of our discoveries and secondly, we will show the details of our findings.


The contracts audited are from the Polymath core repository at The audit is based on the commit bdb055769dd87a09327c6200aed5d994ab0237e8, and updated to reflect changes at d083b134f562108f83c852ba37e25c6c4ee6dc66.

The audit request specified that we looked for the changes to three modules from dev-3.0 to dev-3.1 and the pull request for “Usage Cost” feature:

  • USDTieredSTO

    In directory contracts/modules/STO/USDTiered:
    • USDTieredSTO.sol
    • USDTieredSTOFactory.sol
    • USDTieredSTOStorage.sol
    • USDTieredSTOProxy.sol

There are two major changes in this version:

  • Allow pre-minting of tokens.
    Tokens can be minted before the start of the token sale. This feature can be changed only before the sale starts.
  • Allow fiat currencies other than USD.
    Setting a custom oracle allows the contract to support other fiat currencies.

  • CappedSTO

    In directory contracts/modules/STO/Capped:
    • CappedSTO.sol
    • CappedSTOFactory.sol
    • CappedSTOProxy.sol
    • CappedSTOStorage.sol

There is one major change in this version:

  • Allow pre-minting of tokens.
  • RestrictedPartialTransferManager

    In directory contracts/modules/TransferManager/RPTM:
    • RestrictedPartialSaleTM.sol
    • RestrictedPartialSaleTMFactory.sol
    • RestrictedPartialSaleTMProxy.sol
    • RestrictedPartialSaleTMStorage.sol

this is a new module migrated from experimental that blocks partial transfer of balances.

The following analyses were performed:

  • Misuse of the different call methods: call.value(), send() and transfer().
  • Integer rounding errors, overflow, underflow and related usage of SafeMath functions.
  • Old compiler version pragmas.
  • Race conditions such as reentrancy attacks or front running.
  • Misuse of block timestamps, assuming anything other than them being strictly increasing.
  • Contract softlocking attacks (DoS).
  • Potential gas cost of functions being over the gas limit.
  • Missing function qualifiers and their misuse.
  • Fallback functions with a higher gas cost than the one that a transfer or send call allows.
  • Fraudulent or erroneous code.
  • Code and contract interaction complexity.
  • Wrong or missing error handling.
  • Overuse of transfers in a single transaction instead of using withdrawal patterns.
  • Insufficient analysis of the function input requirements.

Severity Classification

The security risk findings are evaluated according to the following classification:

  • Critical: These are issues that we managed to exploit. They compromise the system seriously. We suggest to fix them immediately.
  • Medium: These are potentially exploitable issues. Even though we did not manage to exploit them or their impact is not clear, they might represent a security risk in the near future. We suggest to fix them as soon as possible.
  • Minor: These issues represent problems that are relatively small or difficult to exploit but can be used in combination with other issues. These kinds of issues do not block deployments in production environments. They should be taken into account and be fixed when possible.
  • Enhancement: These kinds of findings do not represent a security risk. They are best practices that we suggest to implement.

This classification is summarized in the following table:

Detailed findings

Critical severity

No issues have been found.

Medium severity

No issues have been found.

Minor severity

Potential gas issue with transfers in Istanbul

Previously it was considered safe to use Solidity’s transfer and send to transfer Ether from a contract. These primitives provide protection against reentrancy attacks by limiting the execution of the recipient’s fallback function to a maximum gas stipend of 2,300 gas.

The activation of the Istanbul fork of Ethereum’s mainnet on early December 2019 includes EIP 1884 which will increase the cost of several common opcodes. This EIP will possibly affect all contracts that use a fixed amount of gas when calling another contract because the changes in prices will modify  the total gas used.

An important class of affected contracts are the ones that use Solidity’s transfer or send because of the fixed gas stipend. If after the fork the recipient’s fallback function requires more gas than the gas stipend it will cause an “Out of gas” error when called. 

In the function buyWithETHRateLimited of USDTieredSTO there are two transfers of Ether: one to the token sale wallet and another to return the excess to the user.

        // Forward ETH to issuer wallet

        // Refund excess ETH to investor wallet

The function will stop working if either wallet or msg.sender is affected. For a wallet to be affected it has to meet two conditions:

  1. There has to be a contract. This is not unusual because multisig wallets are smart contracts and they are being used.
  2. It has to be affected by EIP 1884. A recent study analyzing the impact has found some notable examples like OpenZepplin SDK, but no popular wallet has been found to be affected.

The owner of the security token can always change the wallet used by calling modifyAddresses. Having an affected wallet can be fixed by the owner.

When a user tries to buy tokens with an affected contract wallet the transaction will fail. We consider this is an unlikely case since no popular wallet has been found to be affected yet.

Considering the future proof of the contracts it is not in the best interest to continue using Solidity’s transfer. Since pricing of opcodes is not fixed; it will be adjusted periodically and the gas stipend will remain fixed at 2,300 gas.We recommend using OpenZeppelin’s sendValue:

function sendValue(address payable recipient, uint256 amount) internal {
    require(address(this).balance >= amount, "Address: insufficient balance");

    // solhint-disable-next-line avoid-call-value
    (bool success, ) ="");
    require(success, "Address: unable to send value, recipient may have reverted");

We understand the potential risk is low and it is easier to suggest to the users to switch to an unaffected wallet. To implement a solution like OpenZeppelin’s sendValue without care might have consequences such as reentrancy attacks. During our audit the contracts examined followed the checks-effects-interactions pattern which should eliminate possible reentrancy attacks.

Token granularity is not respected

A security token’s granularity is the minimum unit in which a token can be divided. Any operation that does not respect the granularity will generate an error making the transaction fail.

The function _modifyTiers of USDTieredSTO receives an array containing the amount of available tokens per tier and another array with the amount of tokens available with discount. The code never verifies if these amounts respect the granularity.

    function _modifyTiers(
        uint256[] memory _ratePerTier,
        uint256[] memory _ratePerTierDiscountPoly,
        uint256[] memory _tokensPerTierTotal,
        uint256[] memory _tokensPerTierDiscountPoly

If the amount of tokens available in a tier does not respect the granularity, it would prevent the tier from being fully sold since amounts lower than the granularity cannot be minted or transferred.

Additionally if the sum of all available tokens returned by _getTotalTokensCap does not respect the granularity, it will fail while trying to enable the pre-minting feature.

    function allowPreMinting() external withPerm(ADMIN) {

The owner can always fix the error by submitting new tiers with the correct granularity through the function modifyTiers.

We suggest to add checks to  _modifyTiers to enforce token’s granularity or to round the tier total to a valid amount.

Similarly in CappedSTO the cap is never checked against the token’s granularity.

Since the cap cannot be modified after the initial configuration, it is not possible to fix it and it will require a new deployment of the module because the sale will not be finalized.

We recommend to enforce the token’s granularity before accepting the cap. Besides, Polymath might provide a method that allows the owner to modify the cap before the token sale starts, if it was configured incorrectly.

The Polymath team has added the checks for granularity at pull request


Code does nothing in function finalize of USDTieredSTO

The function finalize has to mint/transfer unsold security tokens to the Treasury Wallet of the token sale.

At line 359 the variable tempReturn represents the total amount of unsold tokens in every tier.

        if (preMintAllowed) {
            if (tempReturned == securityToken.balanceOf(address(this)))
                tempReturned = securityToken.balanceOf(address(this));

When the condition is satisfied tempReturned will be assigned the same value it already contains.

These values should always be equal. It is an invariant of the contract that minted tokens are accumulated. If they don’t match, it means that  the token balance was manipulated.

If the code is there to check for invalid conditions we recommend to use a require statement instead, making detection during testing easier.

require(tempReturned = securityToken.balanceOf(address(this)), "Invalid balance");

The Polymath team has removed the if at pull request and the balance is assigned inconditionally to tempReturned.

Unnecessary imports

The library SafeMath.sol is imported in the file RestrictedPartialSaleTM.sol.

import "openzeppelin-solidity/contracts/math/SafeMath.sol";

Similarly IPolymathRegistry is included in Module.sol.

import "../interfaces/IPolymathRegistry.sol";

Nevertheless, neither of them is used in any of the functions defined in the file. This will not use extra resources in running time but it will increase compilation time.

We recommend removing them to keep a minimal set of dependencies.

The Polymath team has removed the unneccessary imports at


  1. In USDTieredSTO the owner can configure a custom oracle. Since the oracle is not vetted by anyone, a malicious owner can use an oracle that allows him to manipulate the price.
    Polymath team told us that the functionality is there to allow the owner to change the oracle if it is providing erroneous prices or malfunctioning.
    We understand that investors must have a high degree of trust on the owner to participate in a token sale. It is the owner’s responsibility to adequately configure the token sale including the oracle’s address and to quickly react in case of oracle misbehavior.
    We agree that no change is necessary and the oracles functions as it is expected.
  2. In function _modifyTiers when pre-minting is enabled and tiers are modified it might cause new tokens to be minted or deleted but no events are generated. It might be useful to generate an event when it changes.
    The Polymath team has communicated to us that due to the contract size being too close to the 24 Kbytes limit it will not implement this suggestion. Whenever tiers are updated with the function modifyTiers the event SetTiers is emitted with the data from tiers. If pre-minting is active and tokens are issued or redeemed the corresponding event Issued or Redeemed is emitted by the security token contract.
  3. Function getCustomOracleAddress in USDTieredSTO implicitly returns the zero address when called with FundRaiseType.SC. We recommend to document such behavior.
    The behavior has been documented at pull request
  4. The magic constant uint256(10) ** 18 is used in function _getTokenAmount from CappedSTO. It is better to define it as a constant. The functions div and mul from the library DecimalMath have a similar functionality. Polymath might consider using them instead.
    Now the contract uses the functions provided by DecimalMath
  5. The constructor in DummySTOFactory calls UpgradableModuleFactory with version 3.0.0.
    It was updated to version 3.1.0 at pull request
  6. Some functions have been declared as public but they were declared previously in a base contract as external. For example changeUsageCost in ModuleFactory.sol and changeAllowBeneficialInvestments in CappedSTO.sol. We recommend to always respect the declaration to minimize possible problems in a future refactorization.
    It was fixed so the functions have the proper access qualifier pull request
  7. Some variables don’t have an access qualifier like initialVersion, typesData and tagsData in ModuleFactory.sol, oracleKeys in USDTieredSTOStorage.sol. We recommend to always use the correct access qualifier.
    It was fixed so variables have the correct qualifier at pull request


The audited contracts are simple but they have complex dependencies, making interactions with other contracts more complicated. The contracts are well documented.

We found two minor issues:

  • The next Ethereum fork “Istanbul” changes opcodes pricing making some transfers to fail with an out of gas error in an affected wallet.
  • In USDTieredSTO it is possible to configure tokens amounts that do not respect the token’s granularity.

Disclaimer: This audit report is not a security warranty, investment advice, or an approval of the Polymath Core project since CoinFabrik has not reviewed its platform. Moreover, it does not provide a smart contract code faultlessness guarantee.

An complete report of the audit along with its appendices can be found here