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Security Audits

Comprehensive overview of MegaFi security measures and planned audits. Understand the security approach and roadmap for protocol protection.

At a Glance​

  • Smart contract audits planned before mainnet launch
  • Security-focused development practices
  • Open-source code for transparency
  • Multi-tier testing in progress
  • Bug bounty program to launch post-audit
  • Continuous security monitoring planned

Audit Overview​

Audit Status​

Current Status: Pre-audit phase. Smart contracts are in development and testing.

Planned Audits:

  • Multiple independent security firms to be engaged
  • Comprehensive coverage of all protocol components
  • Audits to be completed before mainnet launch

Timeline: Audits scheduled for completion prior to production deployment.

Note: MegaFi is currently in development. Users should be aware that smart contracts have not yet undergone professional security audits. Use testnet deployments at your own risk.

Planned Audit Coverage​

DEX​

Contracts for Audit:

  • MegaPoolFactory
  • MegaPool implementation
  • PositionManager (LP NFTs)
  • SwapRouter
  • Quoter
  • Periphery contracts

Focus Areas:

  • Concentrated liquidity math
  • Fee calculation accuracy
  • Position management security
  • Reentrancy protection
  • Integer overflow/underflow
  • Access control

CLM​

Contracts for Audit:

  • StrategyManager
  • RebalanceExecutor
  • Strategy mode implementations
  • Zone calculators

Focus Areas:

  • Automated rebalancing logic
  • Gas optimization safety
  • Strategy parameter validation
  • Emergency pause mechanisms
  • Operator permissions

Hedge​

Contracts for Audit:

  • OptionFactory
  • OptionContract
  • CollateralManager
  • Pricing oracles
  • Settlement logic

Focus Areas:

  • Option pricing accuracy
  • Collateral management
  • Collateralization mechanisms
  • Greeks calculations
  • Exercise logic
  • Expiration handling

Security Measures​

Smart Contract Security​

Reentrancy Guards: All external functions with state changes protected.

modifier nonReentrant() {
    require(_status != _ENTERED, "ReentrancyGuard");
    _status = _ENTERED;
    _;
    _status = _NOT_ENTERED;
}

Overflow Protection: Solidity 0.8+ automatic checks.

Access Control: Role-based permissions with OpenZeppelin AccessControl.

Pausable: Emergency pause for all critical operations.

Upgrade Safety: Time-locked upgrades with multi-sig approval.

Oracle Security​

Price Feeds: Multiple oracle sources aggregated.

Manipulation Protection: TWAP (Time-Weighted Average Price) for critical operations.

Staleness Checks: Reject outdated price data.

Fallback Mechanisms: Secondary oracles if primary fails.

Operational Security​

Multi-Sig: Critical operations require multiple signatures.

Timelock: Delays for parameter changes and upgrades.

Monitoring: 24/7 automated monitoring for anomalies.

Incident Response: Documented procedures for security events.

Known Risks​

Smart Contract Risks​

Complexity Risk: Advanced DeFi protocols inherently complex.

Mitigation: Extensive testing, multiple audits, gradual rollout.

Upgrade Risk: Proxy upgrades could introduce vulnerabilities.

Mitigation: Time-locked upgrades, community review, test deployments.

Composability Risk: Integration with other protocols introduces dependencies.

Mitigation: Careful integration testing, fallback mechanisms.

Economic Risks​

Impermanent Loss: Inherent to AMM liquidity provision.

Disclosure: Clearly documented in user-facing materials.

Liquidation Risk: Under-collateralized options positions.

Protection: Conservative margin requirements, automated liquidations.

Oracle Risk: Price manipulation could affect positions.

Mitigation: Multiple oracle sources, TWAP, manipulation detection.

Operational Risks​

Centralization Risk: Some operations initially centralized.

Disclosure: Transparent about centralized components.

Roadmap: Progressive decentralization over time.

Key Management: Admin keys control critical functions.

Protection: Multi-sig with multiple geographically distributed signers.

Bug Bounty Program​

Status​

Coming Soon: Bug bounty program will launch after security audits are completed and mainnet deployment is confirmed.

Planned Scope​

Vulnerabilities in:

  • Smart contracts
  • Frontend application
  • Backend services
  • Infrastructure

Planned Rewards​

Severity-based rewards (amounts to be confirmed at launch):

Critical (funds at risk): High rewards High (major functionality): Significant rewards Medium (minor issues): Moderate rewards Low (informational): Base rewards

Reporting​

For security concerns during development:

Email: security@megafi.app

Please Include:

  • Detailed description
  • Steps to reproduce
  • Proof of concept (if applicable)
  • Suggested fix (optional)

Response: Within 48 hours

Incident Response​

Detection​

Automated monitoring alerts team to:

  • Unusual transaction patterns
  • Large fund movements
  • Failed transaction spikes
  • Oracle anomalies
  • Gas price spikes

Response Procedure​

1. Alert received
2. Severity assessed
3. Team assembled
4. Issue investigated
5. Response executed:
   - Pause if critical
   - Deploy fix
   - Communicate status
6. Post-mortem published

Communication​

During incidents:

Status Page: status.megafi.app

Twitter: @MegaFiApp

Discord: #announcements channel

Email: Sent to affected users

Security Best Practices​

For Users​

Wallet Security:

  • Use hardware wallets for large amounts
  • Verify all transaction details
  • Never share private keys
  • Be wary of phishing attempts

Transaction Safety:

  • Verify contract addresses
  • Set appropriate slippage
  • Check gas estimates
  • Review transaction details

Position Management:

  • Understand impermanent loss
  • Monitor margin levels
  • Set stop-losses
  • Diversify positions

For Developers​

Integration Security:

  • Verify contract addresses from official sources
  • Implement proper error handling
  • Test thoroughly before production
  • Monitor transaction success rates

User Fund Protection:

  • Never store private keys
  • Use secure RPC providers
  • Implement transaction confirmations
  • Provide clear warnings

Testing and Verification​

Current Testing​

Test Coverage:

  • Unit tests for all contract functions
  • Integration tests for multi-contract interactions
  • Scenario-based testing
  • Gas optimization testing

Static Analysis:

  • Slither for vulnerability detection
  • Solhint for code quality
  • Automated security checks in CI/CD

Planned Formal Verification​

Critical components planned for formal verification:

Target Components:

  • Core AMM math
  • Fee calculations
  • Liquidity zone logic
  • Option pricing formulas

Planned Methods:

  • Symbolic execution
  • Model checking
  • Theorem proving

Development Security Practices​

Code Quality​

Current development practices:

Code Reviews: All code reviewed before merge

Test Coverage: Comprehensive test suite

Static Analysis: Automated vulnerability scanning

Gas Optimization: Efficient contract design

Planned Continuous Security​

Post-launch security measures:

Regular Audits: Scheduled external audits

Pre-Release Audits: Before major upgrades

Monitoring: 24/7 automated transaction monitoring

Incident Response: Documented procedures and response team

Security Disclosures​

Transparency Commitment​

MegaFi is committed to full transparency regarding security:

Current Status: Protocol in development and testing phase

Future Disclosure Policy:

  • All audit reports will be published
  • Security incidents will be disclosed promptly
  • Vulnerability findings will be documented
  • Resolutions will be detailed publicly

Post-Audit Updates​

After audits are completed:

  • Full audit reports will be published
  • All findings and resolutions documented
  • Security roadmap updates provided
  • Ongoing security measures detailed

Insurance​

Future Insurance Coverage​

Protocol Insurance: To be explored post-audit and mainnet launch

User Insurance: Third-party DeFi insurance protocols may provide coverage once the protocol is live and audited

Status: Not currently available during development phase

Compliance​

Regulatory Approach​

Proactive compliance:

Jurisdiction: Operating within legal frameworks

KYC/AML: Not currently required (decentralized protocol)

Future: Adapting to evolving regulations

Terms of Service​

Users must acknowledge:

  • Understanding of risks
  • No guarantee of returns
  • Potential for loss
  • Own responsibility for decisions

Contact​

Security-related or any other inquiries:

Email: contact@megafi.app

Response Time: < 24 hours

Resources​

Code Repository: GitHub/Mega-Fi

Audit Reports: Will be published after completion

FAQ​

Are smart contracts audited?
Not yet. Audits are planned and will be completed before mainnet launch. The protocol is currently in development and testing.

What if I find a vulnerability?
Report to security@megafi.app. Bug bounty program will launch post-audit.

Are user funds insured?
No insurance available during development phase. Insurance options will be explored post-launch.

Can contracts be upgraded?
Upgrade mechanisms will be implemented with appropriate governance controls before mainnet.

Is the code open source?
Yes. All smart contracts will be open source and verified on block explorers.

Should I use MegaFi now?
Current deployments are for testing only. Wait for audited mainnet launch before using with significant funds.

Next Steps​

Understand security:

Security first. Always.