Smart contract risk

The contracts implementing XPower Banq are non-trivial. This page is honest about what's been verified and what hasn't.

What's been done

• Internal testing. A comprehensive Foundry test suite covers core operations (supply, borrow, settle, redeem, liquidate, lock, transfer).
• Property tests. Invariants like "total supply equals sum of balances" and "post-tx H ≥ 100% after liquidation" are tested.
• Simulation. Cascade dynamics, capacity dynamics, and TWAP manipulation are simulated across diverse scenarios.

What hasn't been done

• Formal verification. No formal proof of contract correctness has been performed. The whitepaper explicitly flags this as the highest-priority future work.
• External audit. The protocol's plan is to engage external auditors before mainnet launch. Until and unless these are completed and published, the contracts have not been audited.

What this means for users

Smart-contract risk is binary at the worst end: a bug in the Pool, Position, or Vault contracts could cause catastrophic loss of funds. Until formal verification and external audits are completed, this risk is non-trivial.

Mitigations

• Wait for audits if you're capital-conservative. If your goal is capital preservation, wait until the audit page reports completed audits.
• Limit exposure. Allocate to Banq only what you can afford to lose to a smart-contract bug.
• Watch the audit page. Once audits are completed and published, they update the risk profile materially.
• Stay informed. Subscribe to the protocol's incident-reporting channel.

What's likely to be safer than dangerous

The contracts borrow heavily from established patterns:

• ERC20 from OpenZeppelin (well-tested).
• ERC4626 from OpenZeppelin (recent but well-tested).
• AccessControl-style roles (well-tested).

The protocol-specific logic (cap function, lock state, debt-assumption liquidation, log-space TWAP) is novel and is where most of the smart-contract risk concentrates.

Where to go next

• Audits and reviews — current audit status
• Architecture overview — what the contracts do