Dr. David J. Pearce

Formal Verification of a Token Contract

Following on from my previous post on verifying an auction contract in Whiley, I thought it might be useful to look at a more challenging example. A token contract is a very common form of smart contract which allows someone to create and manage their own currency. On Ethereum, token contracts have been standardised in the under ERC20.


A very simple token contract maintains, for each account, a balance of tokens owned by that account. Account holders can transfer tokens to others, but only the contract owner can mint new tokens. The following defines the various components maintained by the contract:

// Account balances
map<uint160,uint256> tokens
// Total tokens in circulation
uint256 total
// Contract owner
uint160 owner

Explicitly maintaining the total number of tokens in circulation may seem unnecessary (i.e. because it can be computed from the map). However, in the context of a smart contract it is useful to avoid such computation (as this can become prohibitively expensive).

Method Specifications

Consider the following implementation of transfer() which includes an incomplete specification of what is required for it to execute (otherwise it reverts) along with the properties that it ensures.

// Transfer some amount of tokens 
// from one account to another.
method transfer(uint160 to, uint256 val)
// (1) Ensure sufficient funds
requires tokens[msg::sender] >= val
// (2) Ensure sender balance decreased
ensures tokens[msg::sender] == old(tokens[msg::sender]) - val
// (3) Ensure target balance increased
ensures tokens[to] == old(tokens[to]) + val:
  tokens[msg::sender] = tokens[msg::sender] - val
  tokens[to] = tokens[to] + val

As expected, the transfer cannot complete unless the account holder has sufficient funds (item (1) above). Likewise, upon completion, the account sender’s balance must have decreased (item (2)) and, accordingly, the destination account balance must have increased (item (3)). The power of a formal verification tool like Whiley is that we can statically check whether or not our implementation meets this specification. In fact, attempting to verify the above in Whiley will immediately raise some errors:

  1. (Integer Overflow). Our implementation above suffers from an integer overflow whereby the value sent overflows target’s balance. Such flaws are certainly exploitable (and have been in the past).
  2. (Logic Error). Our specification also suffers from a more subtle form of logic error. The problem arises when msg::sender == to as, in such case, items (2) and (3) cannot simultaneously hold for the same account!

To resolve these issues and allow the method to pass verification, we must extend the specification with two more requirements:

// (4) Prevent overflow in target account
requires tokens[to] + val <= MAX_UINT256
// (5) Cannot transfer to myself!
requires msg::sender != to

The first of these requirements simply prevents an overflow from occuring, whilst the latter represents one way of fixing the specification (though not the only way).

The following illustrates our implementation of mint() including its specification:

// Mint new coins into target account
method mint(uint160 to, uint256 val)
// Only the owner can mint new coins
requires msg::sender == owner
// Prevent overflow in target account
requires tokens[to] + val <= MAX_UINT256
// Prevent overflow of total
requires (total + val) <= MAX_UINT256
// Ensure target balance increased
ensures tokens[to] == old(tokens[to]) + val:
   tokens[to] = tokens[to] + val
   total = total + val

As before checks are required to protect against overflow, and also to ensure that only owner can mint new tokens.

Contract Invariant

An interesting observation is that the contract maintains an invariant over its storage state. Specifically, that total matches the number of tokens distributed to all account holders. Using Whiley, we can verify this invariant actually holds.

Roughly speaking, to make this work we define sum(map<uin160,uint256> tokens) as a property which sums the tokens from all accounts in the map. Using our property, we can then extend the specification for transfer() as follows (and similarly for mint()):

// Transfer some amount of tokens
// from one account to another.
method transfer(uint160 to, uint256 val)
// (2) Invariant holds on entry
requires sum(tokens) == total
// (5) Invariant holds on exit
ensures sum(tokens) == total:

What remains is to verify this property holds. In fact, this presents some challenges for the verifier used in Whiley, and requires some additional hints (in the form of lemmas).


We have demonstrated how a verification tool like Whiley can be used to verify key properties of our contracts hold. Since Whiley does not yet compile to Ethereum bytecode, this remains a proof-of-concept. Still, the value from doing this should hopefully be apparent!