Preventing Web3 Hacks with Mutation Testing

In September 2024, the Web3 space was shaken by a significant security breach. Penpie Finance, a protocol integrated with the larger Pendle Protocol on Arbitrum, was a victim of a hack resulting in the loss of approximately $27 million. This incident highlighted critical reentrancy vulnerability and raised many questions about the traditional auditing processes.

Could the hack have been prevented? This is exactly what we will explore in this article and reach a verdict on whether $27,000,000 could be saved using Mutation Testing ??

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The Hack and Its Implications

Penpie Finance, designed to boost yields from the Pendle protocol, had undergone two separate audits by reputable firms, Zokyo and Watchpug. Despite these precautions, a vulnerability remained undetected, leading to the substantial loss of funds.

The root cause of the hack was a reentrancy attack, a well-known vulnerability in the blockchain space. What made this case particularly noteworthy was that the vulnerability existed in an admin-only function that was later made permissionless without proper re-auditing.

Implementing Mutation Testing

You might ask, how did two reputable auditing teams miss such a widespread vulnerability? Could the exploit be avoided?

One method to prevent the hack would be mutation testing, a technique that involves introducing small, deliberate changes (mutations) to the code and observing whether existing tests catch these alterations.

How Mutation Testing Works

1. The original smart contract code is slightly modified (mutated). 2. Existing test suites are run against the mutated code. 3. If the tests fail (catch the mutation), it’s considered “killed.” 4. If the tests pass despite the mutation, it’s considered “survived.” 5. Survived mutations indicate potential vulnerabilities or inadequate test coverage.

Introducing Automated Mutation Testing with Olympix AI

To streamline the mutation testing process, you can use AI-powered tools to automatically generate mutations, run tests, and provide detailed reports on the results. This way, you can significantly enhance the security analysis of your smart contract by identifying areas where test coverage may be insufficient or where potential vulnerabilities exist.

One of the tools that does all of the above is Olympix. Olympix serves as an advanced AI-powered tool in a developer’s arsenal, offering several key benefits:

1. Comprehensive Vulnerability Detection: By simulating various code alterations, Olympix helps identify potential security issues that might be overlooked in standard testing.

2. Mutation Testing: Automated mutation testing significantly reduces the time and resources required for thorough security checks. Olympix highlights areas where test suites may be insufficient, prompting more robust testing practices.

3. Automation: Olympix automates the mutation testing process, eliminating the need for developers to manually change code and run tests.

4. Comprehensive Reporting: After executing the tests, Olympix compiles detailed reports that outline which mutations were detected (killed) and which passed through the tests (survived).

The Olympix Workflow:

Let’s examine how Olympix could be used to identify vulnerabilities similar to those exploited in the Penpie Finance hack.

1. Installation: Once you get access to Olympix. Download the executable to your computer and run it with the help flag to see all the available commands. Then make sure to log in to your Olympix account.

2. Project Setup: Open your terminal and navigate to the directory containing your smart contract project. Ensure that all your smart contract files and associated test suites are in their correct locations within the project structure.

3. Initiating Olympix: In your terminal, type and run the following command: olympix generate-mutation-test -p path/to/YourContract.sol Remember to replace path/to/YourContract.sol with the actual path to your smart contract file. This command tells Olympix which contract to analyze.

4. Waiting for Analysis: After executing the command, Olympix will begin its analysis. This process may take several seconds/minutes, depending on the complexity of your contract. During this time, Olympix is generating mutations of your contract and running your existing tests against these mutations.

5. Receiving Results: Once Olympix completes its analysis, you’ll receive a detailed report via email. Check your email inbox for the message from Olympix. You’ll find an attached CSV file containing a comprehensive breakdown of the test results.

6. Interpreting Results: In the file, you’ll see a list of all the mutations Olympix created. Pay attention to which mutations “survived” (weren’t caught by your tests) and which were “killed” (caught by your tests).

7. Analyzing Vulnerabilities: Focus your attention on the survived mutations, as these indicate potential vulnerabilities or areas where your test coverage is insufficient. Take note of the specific lines of code affected and the types of mutations that survived.

8. Improving Code and Tests: Based on the survived mutations, revisit your smart contract code. Address any potential vulnerabilities highlighted by Olympix. Additionally, enhance your test suite to catch the types of issues that the survived mutations revealed.

9. Re-running Olympix: After implementing your improvements, run Olympix again using the same command as before. This second run will help you verify if your changes have effectively addressed the previously identified issues.

10. Iterating: Continue the process of improving your code and tests, then re-running Olympix. Repeat this cycle until you’re confident in the security level of your smart contract. Remember, achieving robust security is an iterative process.

And just like that, using Olympix, you streamline the process of proactively identifying hidden vulnerabilities, helping you improve test coverage and secure smart contracts.

If you’re eager to explore the full potential of the Olympix Mutation Testing tool, you can get a 1 month free Trial. This is a great opportunity to try all of its features and enhance the security of your smart contracts.

Conclusion

• The Penpie Finance hack highlights critical vulnerabilities in DeFi protocols, emphasizing the need for improved security measures.
• Traditional audits, while important, are not sufficient on their own to ensure smart contract security.
• Mutation testing offers a proactive approach to identifying hidden vulnerabilities by systematically altering code and assessing test effectiveness.
• The Olympix AI tool facilitates mutation testing, automating the process and providing detailed reports to developers.
• Regular use of Olympix will ensure ongoing enhancement in test coverage and code design, reducing the likelihood of future vulnerabilities and hacks.