Security

EXNIHILO prioritizes security through multiple layers of protection.

Reentrancy protection

Every state-changing external function in EXNIHILOPool and EXNIHILOFactory uses OpenZeppelin's ReentrancyGuard. This prevents callbacks from re-entering the contract during token transfers.

CEI pattern

All functions follow the Checks-Effects-Interactions pattern:

1. Checks — validate inputs, permissions, caps
2. Effects — update all state variables
3. Interactions — make external calls (transfers, mints)

This ordering ensures that even if reentrancy guard were bypassed, state is already updated before any external call.

Reserve invariant

After every operation:

backedAirToken ≤ airToken.totalSupply()
backedAirUsd  ≤ airUsd.totalSupply()

This is checked at the contract level and prevents the pool from becoming insolvent.

Fee-on-transfer protection

The _transferIn() helper verifies that the actual tokens received match the expected amount:

uint256 before = token.balanceOf(address(this));
token.safeTransferFrom(msg.sender, address(this), amount);
uint256 after = token.balanceOf(address(this));
if (after - before != amount) revert FeeOnTransferNotSupported();

This rejects fee-on-transfer, rebasing, and deflationary tokens that would break the accounting.

Zero-output guards

Position opens that would produce zero output tokens are rejected:

• if (airTokenOut == 0) revert ZeroAmount() on openLong
• if (airUsdOut == 0) revert ZeroAmount() on openShort

This prevents dust attacks and economically meaningless positions.

Slippage protection

All swaps and position opens accept minAmountOut. Transactions revert if output falls below this threshold.

Safe token handling

All token operations use OpenZeppelin's SafeERC20 library, which handles non-standard ERC-20 implementations (missing return values, etc.).

Immutable architecture

• The Factory has no owner and no admin functions
• Pool parameters (swap fee, treasury, NFT contracts) are immutable after deployment
• AirToken's pool binding is one-shot via initPool()
• No proxy patterns, no upgradability

Audit status

WARNING

EXNIHILO has not yet undergone a formal security audit. Use at your own risk.

Test coverage

The protocol has ~150 tests covering:

• Core logic (swaps, positions, liquidity)
• Edge cases and boundary conditions
• Reentrancy attack vectors
• Fee-on-transfer rejection
• Zero-output guards
• Factory fallback behavior