Audits
The first-round Hashlock audit covers the C1 Pool contracts, the fee distribution contract, the liquidity registry and the oracle integration layer. The contracts are now going through a round of improvements ahead of a second audit round. A separate follow-up audit covers the FlowState frontend, the API layer and the Envio indexer infrastructure that surrounds the contracts. The first-round report is available on request to integration partners via contact. The second-round and follow-up reports will be made available on completion.
Smart contract security model
- Time-locked upgrades. Changes to core settlement logic require multi-sig approval and a delay period before execution pre-TGE. Governance transitions to FLOW token holders post-TGE. No instant upgrade pattern.
- Role-separated access control. Administrative functions are split across roles. No single key controls fee rates and oracle feed selection simultaneously.
- Adversarial simulation testing. The contracts have been tested under adversarial conditions including oracle manipulation scenarios, reentrancy, flash loan attacks and integer boundary conditions.
- Production track record. Live in production on KyberSwap. Real trades route through C1 Pools today.
- Audit scope. The C1 Pool contracts completed a first Hashlock audit and are going through a round of improvements ahead of a second audit round. The surrounding frontend, API and Envio indexer infrastructure are undergoing a follow-up audit by Hashlock.
Oracle integrity is the critical risk
Oracle-priced models are only as reliable as their oracle inputs. Thin liquidity tokens are inherently more susceptible to spot-price manipulation than liquid pairs because a smaller capital outlay can move the spot price meaningfully. C1 Pools implement multiple layers of protection.Multi-source aggregation
Where multiple oracle feeds exist for a token, C1 Pools aggregate across sources and reject execution if feeds diverge beyond a configurable threshold. Single-source oracle risk is mitigated by requiring consensus.TWAP smoothing
Time-weighted average price calculations smooth transient price spikes caused by short-duration manipulation. The TWAP window is configurable per pool based on the token’s liquidity profile and oracle availability.Circuit breakers
Execution is paused automatically if the oracle price moves beyond a configurable percentage within a single block or short timeframe. This prevents exploitation during active manipulation events.Rate limits on deposits and withdrawals
Large sudden inflows or outflows can be a precursor to oracle attacks. Rate limits prevent flash-loan-assisted manipulation patterns.Minimum oracle confidence thresholds
Pyth provides a confidence interval alongside each price. C1 Pools require oracle confidence to be within an acceptable band before executing, preventing trades during periods of oracle uncertainty.Lessons from oracle-priced incidents
The following incidents inform FlowState’s mitigation set. None of them happened on C1 Pools. They are instructive because they show how oracle-priced models can fail and how mitigations evolved in response.
C1 Pools include multi-source aggregation, TWAP smoothing, circuit breakers, rate limits and confidence thresholds from launch. The mitigation playbook is well-developed in the perpetual DEX space (GMX, Hyperliquid, Drift), refined in response to incidents like those above, and FlowState applies the same toolkit. The mitigations are part of the protocol’s core design, not retrofit responses to FlowState-specific incidents.
What this does and does not protect against
Protected against: short-duration spot manipulation
Protected against: short-duration spot manipulation
Manipulating the on-chain spot price for a few blocks does not move the C1 Pool price because TWAP smoothing and multi-source aggregation reject single-block anomalies.
Protected against: flash-loan-assisted attacks
Protected against: flash-loan-assisted attacks
Rate limits on deposits and withdrawals prevent the typical flash-loan-then-manipulate pattern. Circuit breakers add a second layer.
Protected against: single-oracle compromise
Protected against: single-oracle compromise
Where multiple feeds exist, divergence beyond threshold halts execution. Single-source attacks require both oracles to be compromised simultaneously.
Not fully protected against: sustained off-chain price manipulation
Not fully protected against: sustained off-chain price manipulation
If a token’s underlying market is manipulated for a sustained period (long enough to move the TWAP), the oracle price reflects the manipulated market. This is not specific to C1 Pools. It is a property of any oracle-priced system. Token-specific guardrails (configurable per pool) and conservative parameters on thin-liquidity tokens manage this risk.
Not protected against: malicious oracle providers
Not protected against: malicious oracle providers
If Pyth or Chainlink were compromised, C1 Pools using those feeds would be affected. This is the same systemic dependency every oracle-priced protocol carries. Multi-source aggregation reduces this exposure where multiple feeds exist.
Reporting security issues
Security issues should be reported to support@flowstate.exchange with[SECURITY] in the subject line.
For lending protocols and high-stakes integrations, dedicated risk model collaboration is available. Contact the team to discuss specific oracle alignment, depth requirements and circuit breaker configurations.