Tribe3
Summary
Tribe3 is a perpetual futures exchange for trading NFTs. Users can open leveraged long/short positions on a collection of their choice. Though NFTs are an illiquid asset, Tribe3 simulates liquidity through a vAMM that attempts to track the floor price of its corresponding NFT collection. Given that there are no underlying assets in the vAMM, a few mechanisms were implemented to incentivize opening positions that correct price deviations, as well as forcing a repegging of the price should it deviate by too far for too long. A particular area of focus is the insurance fund, a pool of money that is built on transaction fees and used to fund the price alignment mechanisms and cover bad debt. It is of critical importance to ensure that these funds are kept safe and only used as intended. Given the importance of maintaining a peg between the vAMM price and the oracle price, it is vital that the protocol is tested against the oracle and that the oracle price updates accurately and consistently enough to meet the protocol's needs (QSP-2). The correctness of the used oracle is out of scope for this audit. Additionally, it is important that the protocol is able to facilitate price discovery in the event of rapid price changes (QSP-17 & QSP-18). We also note that there may be a reduction in the effectiveness of the price alignment mechanisms given their predictable cadence (QSP-11), though we were not able to identify a security threat. The quality of the testing suite was difficult to assess due to the lack of coverage testing. We encourage the Tribe3 team to instrument the test suite for coverage to ensure thorough testing before launch.
Issues (18)
Low | Medium | High | Critical | Total | |
|---|---|---|---|---|---|
Not fixed | 4 | 1 | - | - | 5 |
Fixed | 12 | - | 1 | - | 13 |
| Total | 16 | 1 | 1 | 0 | 18 |