xBacked

xBacked Audit on Algorand

About

xBacked is a decentralized, over-collateralized stablecoin on Algorand. We have audited its smart contracts.

Industry

Fintech & crypto

Timeline

March – May 2022

Scope

Smart Contract Audit

Remediation Audit

Technology

Reach, TEAL

Technology

xBacked launches a new decentralized stablecoin called xUSD on Algorand. xUSD is governed by a DAO and backed by ALGO instead of centralized assets. The issuance of xUSD is fully based on smart contracts. The working principle is similar to DAI, a popular crypto-backed stablecoin on Ethereum.

Challenge

Stablecoins are a critical part of the crypto ecosystem as they allow their holders to benefit from the censorship-resilliance of cryptocurrencies and the stability of a dollar or other fiat currencies. But as anyone expects them to counter the volatility of other digital assets, if they lose their peg, the losses are severe and completely unexpected.

To learn how xBacked’s code works and ensure it will work as intended, we’ve analyzed several areas:

– checking security posture – the measure of controls and processes the company has implemented to protect their product from cyber attacks, react, and recover, and more,

– verifying security measures – verifying their maturity, adequacy, and efficiency,

– proposing and verifying remediations – after pointing possible security issues, we had to verify if they have been updated.

We have conducted the audit on xBacked private GitHub Repository.

Solution

The audit found several security issues that were presented with severity scores from low to critical:

  • Critical: 2
  • High: 5
  • Medium: 5
  • Low: 3
  • Informational: 1

All the issues had been discussed with xBacked team and addressed appropriately. After confirmed remediations, our team had again reviewed the code to verify that the fixes were merged.

If you would like to learn more about our findings, head over to the original report.

Key features

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