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audit: add audit for lp bug - fixes #7 (#8)
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‎audit/bug2_bootstrap_lp_shares_stuck.py‎

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"""
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Proof-of-Concept: Bootstrap LP Shares Inaccessible if Creator Never Opts In
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Demonstrates that the market creator's LP shares (minted during bootstrap)
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are stored in `bootstrapper_lp_shares` global state and only transferred to
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the creator on their first opt-in. If the creator never opts in, these shares
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remain unowned, making the bootstrap deposit partially inaccessible.
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Impact:
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- LP fee accrual on creator's shares is lost (dilutes to zero)
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- LP residual claims for creator's share of the pool are impossible
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- In the on-chain contract, bootstrapper_lp_shares stays non-zero but
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nobody holds them, so lp_shares_total includes phantom shares
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Reference:
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- smart_contracts/market_app/contract.py: bootstrap() (line 910-947)
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- smart_contracts/market_app/contract.py: opt_in() (line 154-161)
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Author: bounty audit
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"""
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import sys
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# ──────────────────────────────────────────────────────
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# Constants
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# ──────────────────────────────────────────────────────
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SCALE = 1_000_000
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STATUS_ACTIVE = 1
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STATUS_CANCELLED = 4
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STATUS_RESOLVED = 5
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# ──────────────────────────────────────────────────────
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# Simulated bootstrap flow
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# ──────────────────────────────────────────────────────
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def simulate_bootstrap_with_optin():
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"""Normal flow: creator opts in and claims LP shares."""
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b = 1_000_000 # 1 USDC liquidity parameter
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deposit = 2_000_000 # 2 USDC bootstrap deposit
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# After bootstrap():
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pool_balance = deposit
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lp_shares_total = b
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bootstrapper_lp_shares = b # stored in global state
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# After creator opts in:
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creator_lp_shares = bootstrapper_lp_shares # transferred
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bootstrapper_lp_shares = 0 # cleared
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print("=" * 60)
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print(" Normal flow: creator opts in")
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print("=" * 60)
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print(f" Bootstrap deposit: {deposit:>12,} μA")
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print(f" LP shares (b): {b:>12,}")
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print(f" bootstrapper_shares: {bootstrapper_lp_shares:>12,} (cleared after opt-in)")
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print(f" creator_lp_shares: {creator_lp_shares:>12,} (claimed)")
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print()
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def simulate_bootstrap_without_optin():
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"""Buggy flow: creator never opts in."""
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b = 1_000_000
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deposit = 2_000_000
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# After bootstrap():
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pool_balance = deposit
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lp_shares_total = b
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bootstrapper_lp_shares = b # STILL non-zero
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# Creator never opts in → bootstrapper_lp_shares stays at b
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# Nobody holds LP shares, but lp_shares_total = b
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# Simulate some trading (alice buys outcome 0)
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# Pool grows from fees
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lp_fee_balance = 10_000 # 0.01 USDC in LP fees
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# After resolution, LP residual calculation:
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# _total_residual_weight() uses lp_shares_total = b
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# But nobody can claim because nobody holds LP shares
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total_residual_entitled = 50_000 # hypothetical residual pool
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total_weight = b # only phantom shares
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# Each LP's claim = (pool * their_weight) / total_weight
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# But nobody has weight > 0 → 0 claims possible
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creator_claimable = 0 # creator has 0 LP shares
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phantom_shares = bootstrapper_lp_shares # orphaned
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print("=" * 60)
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print(" Buggy flow: creator never opts in")
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print("=" * 60)
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print(f" Bootstrap deposit: {deposit:>12,} μA")
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print(f" LP shares (b): {b:>12,}")
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print(f" bootstrapper_shares: {phantom_shares:>12,} (STUCK in global state)")
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print(f" creator_lp_shares: {creator_claimable:>12,} (never claimed)")
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print(f" lp_shares_total: {b:>12,} (includes phantom shares)")
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print()
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print(" Effects:")
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print(f" - LP fees accrue but nobody can claim them")
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print(f" - Residual pool diluted by phantom shares")
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print(f" - Bootstrap deposit partially locked")
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print()
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# ──────────────────────────────────────────────────────
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# Concrete fund loss calculation
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# ──────────────────────────────────────────────────────
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def fund_loss_calculation():
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"""Calculate the locked funds in the no-opt-in scenario."""
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b = 1_000_000 # LP shares
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deposit = 2_000_000 # bootstrap deposit
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# After resolution with winning outcome 0:
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pool_balance = 2_500_000 # grew from trading
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winning_shares = 500_000 # user shares in outcome 0
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# Releasable residual pool:
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# free_pool = pool_balance + total_residual_claimed
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# reserve = winning_shares (if resolved)
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free_pool = pool_balance
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reserve = winning_shares
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releasable = free_pool - reserve # 2_000_000
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# Total residual weight = lp_shares_total = b = 1_000_000
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# But nobody holds shares → nobody can claim
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unclaimable_residual = releasable
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print("=" * 60)
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print(" Fund loss calculation")
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print("=" * 60)
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print(f" Pool balance: {pool_balance:>12,} μA")
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print(f" Winner reserve: {reserve:>12,} μA")
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print(f" Releasable residual: {releasable:>12,} μA")
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print(f" LP shares held: 0 (creator never opted in)")
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print(f" Unclaimable residual: {unclaimable_residual:>12,} μA ({unclaimable_residual/1e6:.1f} USDC)")
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print()
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# ──────────────────────────────────────────────────────
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# Main
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# ──────────────────────────────────────────────────────
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if __name__ == "__main__":
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print()
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simulate_bootstrap_with_optin()
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simulate_bootstrap_without_optin()
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fund_loss_calculation()
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print("=" * 60)
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print(" VERDICT")
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print("=" * 60)
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print()
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print(" If the market creator never calls opt_in(), their LP shares")
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print(" (minted during bootstrap) remain in bootstrapper_lp_shares")
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print(" global state. Nobody holds these shares, so:")
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print(" 1. LP fee accrual on these shares is unclaimable")
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print(" 2. LP residual claims are diluted by phantom shares")
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print(" 3. A portion of the bootstrap deposit is permanently locked")
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print()
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print(" Impact: Permanent lock of bootstrap deposit proportional to")
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print(" creator's LP share fraction.")
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print(" Qualifies under bounty scope: 'affect user funds — permanent lock'")
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print()
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sys.exit(0)

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