Ternoa

Bridge Relayer
SMART CONTRACT AUDIT
24.05.2022

Made in Germany by Chainsulting.de

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Table of contents

1. Disclaimer.................................................................................................................................................................................................................... 3
2. About the Project and Company ............................................................................................................................................................................. 4
2.1 Project Overview .................................................................................................................................................................................................. 5
3. Vulnerability & Risk Level ......................................................................................................................................................................................... 6
4. Auditing Strategy and Techniques Applied ............................................................................................................................................................ 7
4.1 Methodology ......................................................................................................................................................................................................... 7
5. Metrics ......................................................................................................................................................................................................................... 8
5.1 Tested Files .......................................................................................................................................................................................................... 8
5.2 Dependencies ...................................................................................................................................................................................................... 9
5.3 Codebase Overview ............................................................................................................................................................................................ 9
5.4 Architecture Overview ....................................................................................................................................................................................... 11
6. Scope of Work .......................................................................................................................................................................................................... 12
6.1 Findings Overview ............................................................................................................................................................................................. 13
6.2 Manual and Automated Vulnerability Test ..................................................................................................................................................... 14
6.2.1 Parameter Pending Is Missing ..................................................................................................................................................................... 14
6.2.2 No Error Handling For pollBlocks() .............................................................................................................................................................. 15
6.2.3 Incorrect Assertion Of GasPrice And GasLimit ......................................................................................................................................... 16
6.2.4 Incorrect Operator Used ................................................................................................................................................................................ 17
6.2.5 Feature Chain ID Problems > 255 ............................................................................................................................................................... 18
6.2.6 Variables Could Be Declared As Constant ................................................................................................................................................ 19
6.2.7 Dead Or Commented Out Code .................................................................................................................................................................. 19
6.2.8 Parameter Restriction .................................................................................................................................................................................... 20

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 6.2.9 Use Different Method Instead Of cmp() ...................................................................................................................................................... 21
6.3 Excluded Audit Parts ......................................................................................................................................................................................... 22
7. Executive Summary................................................................................................................................................................................................. 22
8. About the Auditor ..................................................................................................................................................................................................... 23

1. Disclaimer
The audit makes no statements or warrantees about utility of the code, safety of the code, suitability of the business model, investment
advice, endorsement of the platform or its products, regulatory regime for the business model, or any other statements about fitness of
the contracts to purpose, or their bug free status. The audit documentation is for discussion purposes only.

The information presented in this report is confidential and privileged. If you are reading this report, you agree to keep it confidential,
not to copy, disclose or disseminate without the agreement of CAPSULE CORP. LABS SASU. If you are not the intended receptor of
this document, remember that any disclosure, copying or dissemination of it is forbidden.

Major Versions / Date Description

0.1 (11.05.2022) Layout
0.2 (13.05.2022) Test Deployment
0.5 (15.05.2022) Automated Security Testing
Manual Security Testing
0.6 (16.05.2022) Development Productivity (Code Conventions Check, packages)
0.7 (17.05.2022) Performance (Connection pooling, caching, Transaction Concurrency)
0.8 (17.05.2022) Maintainability & Ease of Deployment
0.9 (19.05.2022) Summary and Recommendation
1.0 (19.05.2022) Final document
1.1 (24.05.2022) Re-Check a2f81d4e82454cd1d33eb4c12027100f00d66eba

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2. About the Project and Company

Company address:

CAPSULE CORP. LABS SASU

19 Bd Malesherbes
75008 Paris
France

Website: https://www.ternoa.com

Twitter: https://twitter.com/ternoa_

GitHub: https://github.com/capsule-corp-ternoa

Telegram: https://t.me/ternoa

Discord: https://discord.gg/cNZTGtGJNR

Twitch: https://www.twitch.tv/ternoatv

Instagram: https://www.instagram.com/ternoa_

Medium: https://medium.com/ternoa

LinkedIn: https://www.linkedin.com/company/ternoa

YouTube: https://www.youtube.com/channel/UCUYvbtRE5HoWPz7z88V7Khw

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2.1 Project Overview
Ternoa is an NFT-focused chain based on Substrate that aims to provide the best experience for developers and users of NFT-driven
dApps.

Ternoa’s unique innovation include the ability for users to store private data within NFTs, user-specified conditions for automated
transfers of the secret NFTs to other wallets, lending or sharing NFTs with others while retaining full-rights and NFT ownership,
combining multiple NFTs into a new NFT, and sharing of NFT ownership through fractionalization.

Ternoa Bridge

A blockchain bridge provides a connection that allows for the transfer of tokens between two different blockchain ecosystems. A bridge
is required for Ternoa because as of the ICO date, CAPS were ERC-20 tokens. However, native CAPS are necessary to take part in
staking and rewards on Ternoa, as well as paying transaction fees.

The Ternoa bridge enables CAPS ERC-20 holders to transfer the token onto the Ternoa blockchain, on a 1:1 ratio. Unlike many other
bridges, the Ternoa Bridge will lock the ERC20 CAPS and mint the equivalent in native CAPS on the Ternoa Network.

In this manner, if you decide to sell your native CAPS, you will need to transfer them back to the Ethereum network by using the
Ternoa Bridge again. ERC20 contracts are built using ChainBridge, a modular Multi-Directional Blockchain Bridge to interact with
Ethereum, Substrate, based chains networks.

Documentation: https://docs.ternoa.network/v/bridge/

Frontend: https://bridge.ternoa.com

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3. Vulnerability & Risk Level
Risk represents the probability that a certain source-threat will exploit vulnerability, and the impact of that event on the organization or
system. Risk Level is computed based on CVSS version 3.0.

Level Value Vulnerability Risk (Required Action)

Critical 9 – 10 A vulnerability that can Immediate action to reduce risk level.
disrupt the code functioning
in a number of scenarios
or creates a risk that the
code may be broken.
High 7 – 8.9 A vulnerability that affects Implementation of corrective actions as soon as
the desired outcome when possible.
using a codebase,
or provides the opportunity
to use an application in an
unintended way.
Medium 4 – 6.9 A vulnerability that could Implementation of corrective actions in a certain
affect the desired outcome of period.
executing the code in a
specific scenario.
Low 2 – 3.9 A vulnerability that does not Implementation of certain corrective actions or
have a significant impact on accepting the
possible scenarios for the risk.
use of the code and is
probably subjective.
Informational 0 – 1.9 A vulnerability that have An observation that does not determine a level of risk
informational character but is
not effecting any of the
code.

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4. Auditing Strategy and Techniques Applied
Throughout the review process, care was taken to evaluate the repository for security-related issues, code quality, and adherence to
specification and best practices. To do so, reviewed line-by-line by our team of expert pen testers and developers, documenting any
issues as there were discovered.

4.1 Methodology
The auditing process follows a routine series of steps:

1. Code review that includes the following:

i.Review of the specifications, sources, and instructions provided to Chainsulting to make sure we understand the size,
scope, and functionality of the codebase.
ii.Manual review of code, which is the process of reading source code line-by-line in an attempt to identify potential
vulnerabilities.
iii.Comparison to specification, which is the process of checking whether the code does what the specifications, sources,
and instructions provided to Chainsulting describe.

2. Testing and automated analysis that includes the following:

i.Test coverage analysis, which is the process of determining whether the test cases are actually covering the code and
how much code is exercised when we run those test cases.
ii.Symbolic execution, which is analysing a program to determine what inputs causes each part of a program to execute.

3. Best practices review, which is a review of the codebase to improve efficiency, effectiveness, clarify, maintainability,
security, and control based on the established industry and academic practices, recommendations, and research.

4. Specific, itemized, actionable recommendations to help you take steps to secure your codebase.

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5. Metrics
The metrics section should give the reader an overview on the size, quality, flows and capabilities of the codebase, without the
knowledge to understand the actual code.

5.1 Tested Files

The following are the MD5 hashes of the reviewed files. A file with a different MD5 hash has been modified, intentionally or otherwise,
after the security review. You are cautioned that a different MD5 hash could be (but is not necessarily) an indication of a changed
condition or potential vulnerability that was not within the scope of the review

File Fingerprint (MD5)

./src/chains/ethereum/ABIs.ts ec3618813fbc37834032bba59cf4d9d6
./src/chains/ethereum/chain.ts 72baedd1fa5b5ed7c981b561bf2dad42
./src/chains/ethereum/connection.ts 76a87fe0a91c912b749fff02315e3370
./src/chains/ethereum/listener.ts b19b3a83de87be47a7058fc589a2c261
./src/chains/ethereum/transaction.ts 75659b9003fb53c375a222995907b46a
./src/chains/ethereum/writer.ts 2a8bca4283b9b76331845ba542580b50
./src/chains/substrate/chain.ts 53052c71fb9dbbacb3960dec776c18f5
./src/chains/substrate/connection.ts 55dd463431af7da5034fb209efd4c8c9
./src/chains/substrate/listener.ts 05b0f047fc80bcecc58d46eff1d8c348
./src/chains/substrate/writer.ts 0c1655102db469e95fb39f67894ac2dd
./src/utils/blockstore.ts 45550b8982b8af78c9d050b69e6cdb40
./src/utils/chain-interface.ts 129e3743423b2f466ccf32e452e5172c
./src/utils/core.ts d4a9702f2f162f409ef9240ead23b101
./src/utils/msg.ts 0d7414023e803ddec820449f8c8b0e57
./src/utils/system.ts 2bd0c7f8efff7048b35391b497ee61d9

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5.2 Dependencies

Dependency / Import Path Source

@badrap/result https://www.npmjs.com/package/@badrap/result

@polkadot/api https://www.npmjs.com/package/@polkadot/api

ethers https://www.npmjs.com/package/ethers

5.3 Codebase Overview

Source: https://github.com/capsule-corp-ternoa/ternoa-bridge-core

language files code comment blank total

TypeScript 15 2,251 64 151 2,500

filename language code comment blank total

src/chains/ethereum/ABIs.ts TypeScript 1,233 0 2 1,235

src/chains/ethereum/chain.ts TypeScript 76 9 18 103

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filename language code comment blank total

src/chains/ethereum/connection.ts TypeScript 24 0 3 27

src/chains/ethereum/listener.ts TypeScript 117 4 14 135

src/chains/ethereum/transaction.ts TypeScript 210 25 36 271

src/chains/ethereum/writer.ts TypeScript 26 4 7 37

src/chains/substrate/chain.ts TypeScript 64 7 16 87

src/chains/substrate/connection.ts TypeScript 34 0 7 41

src/chains/substrate/listener.ts TypeScript 88 6 17 111

src/chains/substrate/writer.ts TypeScript 159 9 28 196

src/utils/blockstore.ts TypeScript 25 0 3 28

src/utils/chain-interface.ts TypeScript 67 0 6 73

src/utils/core.ts TypeScript 54 0 12 66

src/utils/msg.ts TypeScript 40 0 6 46

src/utils/system.ts TypeScript 34 0 10 44

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5.4 Architecture Overview

Ternoa Bridge is built on ChainBridge, a modular Multi-Directional Blockchain Bridge to interact with Ethereum, Substrate, based
chains networks. ChainBridge is an extensible cross-chain communication protocol. It currently supports bridging between EVM and
Substrate based chains.

A bridge contract (or pallet in Substrate) on each chain forms either side of a bridge. Handler contracts allow for customizable
behaviour upon receiving transactions to and from the bridge. For example locking up an asset on one side and minting a new one on
the other.

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6. Scope of Work
The Ternoa Team provided us with the files that needs to be tested. The scope of the audit is the bridge relayer codebase.

1. Automated Vulnerability Test (OWASP, Acunetix, Sonarsource, Snyk, jsfuzz..)

2. Manual Security Testing (Line by line, Overflow, CVE...)
3. Test environment deployment
4. Evaluating and testing software architecture
- Development Productivity (Code Conventions Check, packages)
- Functions & Logic Testing
- Performance (Connection pooling, caching, Transaction Concurrency)
- Reliability & Availability
- Maintainability & Ease of Deployment

The main goal of this audit was to make sure the infrastructure is built according to newest standards and securely developed. The
auditors can provide additional feedback on the code upon the client’s request.

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6.1 Findings Overview

CRITICAL

9 HIGH

Total Issues MEDIUM

LOW
2
INFORMATIONAL

No Title Severity Status

6.2.1 Parameter Pending Is Missing MEDIUM FIXED
6.2.2 No Error Handling For pollBlocks() MEDIUM FIXED
6.2.3 Incorrect Assertion Of GasPrice And GasLimit LOW FIXED
6.2.4 Incorrect Operator Used LOW FIXED
6.2.5 Feature Chain ID Problems > 255 LOW ACKNOWLEDGED
6.2.6 Variables Could Be Declared As Constant LOW FIXED
6.2.7 Dead Or Commented Out Code LOW FIXED
6.2.8 Parameter Restriction INFORMATIONAL ACKNOWLEDGED
6.2.9 Use Different Method Instead Of cmp() INFORMATIONAL FIXED

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6.2 Manual and Automated Vulnerability Test

CRITICAL ISSUES
During the audit, Chainsulting‘s experts found 0 Critical issues in the code of the smart contract.

HIGH ISSUES
During the audit, Chainsulting’s experts found 0 High issues in the code of the smart contract.

MEDIUM ISSUES
During the audit, Chainsulting’s experts found 2 Medium issues in the code of the smart contract.

6.2.1 Parameter Pending Is Missing

Severity: MEDIUM
Status: FIXED
Code: CWE-234
File(s) affected: src/chains/ethereum/transaction.ts
Update: Commit 841f6087bd130fd1619dfb03a1826512f8889b29

Attack / Description getTransactionCount() should have the second parameter set to “pending”. Because the default is
“latest” which could result in using a nonce which is in use by a pending transaction. Also keeping
an internal count of the current nonce and comparing it with getTransactionCount() can lead to
better results in situations where the RPC server might not be fully sync with the blockchain or
crashed.

Code Line 77 - 80 (src/chains/ethereum/transaction.ts)

// Save the next nonce to be used if it's not a replacement

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 if (!replace || !options.nonce) {
options.nonce = await
this.conn.provider.getTransactionCount(this.conn.key.address);
}

Result/Recommendation We recommend to add a second parameter “pending” to getTransactionCount() and internal count
& compare of the current nonce.

6.2.2 No Error Handling For pollBlocks()

Severity: MEDIUM
Status: FIXED
Code: CWE-703
File(s) affected: src/chains/ethereum/listener.ts, src/chains/substrate/listener.ts
Update: Commit 841f6087bd130fd1619dfb03a1826512f8889b29

Attack / Description If pollBlocks() throws or returns an error, it will just be displayed. There is no error handling to
restart pollBlocks() or to exit the process, to have it auto restarted externally. This can lead to
bridge errors and outages.

Code Line 41 - 50 (src/chains/ethereum/listener.ts)

// Start the worker

(async () => {
try {
const res = await this.pollBlocks();
if (res.isErr) {
throw res.error;
}
} catch (error: any) {
console.log(`ETHEREUM - Polling blocks failed. Error: ${logError(error)}`);

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 }
})();

Line 41 - 50 (src/chains/substrate/listener.ts)

// Start the worker

(async () => {
try {
const res = await this.pollBlocks();
if (res.isErr) {
console.log(`SUBSTRATE - Polling blocks failed. Error:
${logError(res.error)}`);
}
} catch (error: any) {
console.log(`SUBSTRATE - Polling blocks failed. Error: ${logError(error)}`);
}
})();

Result/Recommendation We recommend to add an error handling, to restart pollBlocks() or to exit the process.

LOW ISSUES
During the audit, Chainsulting’s experts found 5 Low issues in the code of the smart contract.

6.2.3 Incorrect Assertion Of GasPrice And GasLimit

Severity: LOW
Status: FIXED

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Code: NA
File(s) affected: src/chains/ethereum/transaction.ts,
Update: Commit 841f6087bd130fd1619dfb03a1826512f8889b29

Attack / Description The types of gasPrice and gasLimit should not be asserted to BigNumber. gasPrice and gasLimit
should be checked for being undefined and an error should be thrown if they are. If they are
undefined and be used as BigNumber an error would be thrown anyway.

Code Line 244 (src/chains/ethereum/transaction.ts)

// Calculate fee
const voteFee = (options.gasPrice as BigNumber).mul(options.gasLimit as BigNumber);

Result/Recommendation We recommend to remove the assertion of gasPrice and gasLimit from BigNumber. gasPrice and
gasLimit should be checked for being undefined and an error should be thrown if they are.

6.2.4 Incorrect Operator Used

Severity: LOW
Status: FIXED
Code: CWE-480
File(s) affected: src/chains/substrate/writer.ts
Update: Commit 841f6087bd130fd1619dfb03a1826512f8889b29

Attack / Description An operator defines some function that will be performed on the data. The data on which operators
work are called operands. Wrong operators can lead to undefined results.

Code Line 141 (src/chains/substrate/writer.ts)

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 if (!(new BN(expiry).cmp(finalizedBlockNumber) === 1)) {
return Result.ok([false, "proposal expired"]);
}

Result/Recommendation Use the opposite operator (!==) instead.

6.2.5 Feature Chain ID Problems > 255

Severity: LOW
Status: ACKNOWLEDGED
Code: NA
File(s) affected: src/chains/ethereum/transaction.ts,

Attack / Description If originDomainID (chain ID) is greater than 255 the resulting value will be ambiguous for some
depositNonce values.

Code Line 258 (src/chains/ethereum/transaction.ts)

private getDestAndNonce(depositNonce: BN, originDomainID: BN): BigNumber {

//Equivalent in solidity : (uint72(depositNonce) << 8) | uint72(originDomainID)
return
BigNumber.from(depositNonce.toString()).shl(8).or(BigNumber.from(originDomainID.toString()));
}

Result/Recommendation There's a bunch of other chains using large values for the chain id (https://github.com/ethereum-
lists/chains), better to increase depositNonce unit

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6.2.6 Variables Could Be Declared As Constant
Severity: LOW
Status: FIXED
Code: NA
File(s) affected: src/chains/substrate/chains.ts, src/chains/ethereum/chain.ts, src/chains/substrate/writer.ts,
src/chains/ethereum/transaction.ts, src/chains/substrate/connection.ts, src/utils/core.ts
Update: Commit 841f6087bd130fd1619dfb03a1826512f8889b29

Attack / Description Variables can be declared using const similar to var or let declarations. The const makes a variable
a constant where its value cannot be changed. Const variables have the same scoping rules as let
variables. Const variables must be declared and initialized in a single statement.

Code src/chains/substrate/chains.ts:(24, 43, 47, 55)

src/chains/ethereum/chain.ts(25, 44, 48, 55, 65, 75)
src/chains/substrate/writer.ts:(30, 38, 44, 51, 67, 120)
src/chains/ethereum/transaction.ts:(40, 229)
src/chains/substrate/connection.ts:(20, 29)
src/utils/core.ts:(54)

Result/Recommendation We recommend declaring the above variables as constant.

6.2.7 Dead Or Commented Out Code

Severity: LOW
Status: FIXED
Code: CWE-561
File(s) affected: src/chains/ethereum/chain.ts
Update: Commit 841f6087bd130fd1619dfb03a1826512f8889b29

Attack / Description Programmers should not comment out code as it bloats programs and reduces readability.

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 Code Line 77 (src/chains/ethereum/chain.ts)

// Save the next nonce to be used if it's not a replacement

Result/Recommendation The comment is false. There is no check. Unused code should be deleted and can be retrieved
from source control history if required.

INFORMATIONAL ISSUES
During the audit, Chainsulting’s experts found 2 Informational issues in the code of the smart contract.

6.2.8 Parameter Restriction

Severity: INFORMATIONAL
Status: ACKNOWLEDGED
Code: NA
File(s) affected: src/utils/blockstore.ts

Attack / Description The parameter “chainName” could be restricted to names of chains that are used to prevent typos
on calling the function.

Code Line 5, 16 (src/utils/blockstore.ts)

export async function saveBlockNumber(currentBlockNumber: BN, chainName: string): Promise<void> {

export async function readBlockNumber(chainName: string): Promise<string | null> {

Result/Recommendation We recommend to restrict the parameter to for example chainName: “substrate” | “ethereum”

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6.2.9 Use Different Method Instead Of cmp()
Severity: INFORMATIONAL
Status: FIXED
Code: NA
File(s) affected: src/chain/ethereum/listener.ts, src/chains/substrate/writer.ts
Update: Commit 841f6087bd130fd1619dfb03a1826512f8889b29

Attack / Description Certain methods instead of cmp() will improve the code readability

Code Line 32, 66 (src/chain/ethereum/listener.ts)

if (lastBlockNumber.cmp(this.startBlock) === -1) {

if (lastBlockNumber.sub(currentBlockNumber).cmp(new BN(BLOCK_CONFIRMATION)) === -1) {

Line 141, 178 (src/chains/substrate/writer.ts)

if (!(new BN(expiry).cmp(finalizedBlockNumber) === 1)) {

if (balance.cmp(fee) === -1) {

Result/Recommendation Using the methods lt(), lte(), gt() and gte() instead of cmp() would improve code readability.

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6.3 Excluded Audit Parts

The Ternoa Bridge is based on unchanged code from Chainbridge, which was audited by consensys and was not part of this audit.

Source: https://github.com/ChainSafe/ChainBridge

Documentation: https://chainbridge.chainsafe.io

Audit: https://consensys.net/diligence/audits/private/adash47d-chainbridge/ (May 2020)

7. Executive Summary
Two (2) independent Chainsulting experts performed an unbiased and isolated audit of the architecture and codebase. The
final debriefs took place on the May 19, 2022.

The main goal of this audit was to make sure the bridge relayer is built according to newest standards and securely developed. During
the audit, no critical, no high, 2 medium, 5 low and 3 informational issues were found, after the manual and automated security testing.

We recommend the following things to apply to the next dev ops:

i. Check our issues and get them fixed

ii. Make sure newest packages are used, wherever possible
iii. Check for possible centralization risk if you run one relayer
iv. Check open issues from ChainBridge https://github.com/ChainSafe/ChainBridge/issues and fix in your fork if necessary

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8. About the Auditor

Chainsulting is a professional software development firm, founded in 20217 and based in Germany. They show ways, opportunities,
risks and offer comprehensive blockchain solutions. Some of their services include blockchain development, smart contract audits and
consulting.
Chainsulting conducts code audits on market-leading blockchains such as Hyperledger, Tezos, Ethereum, Binance Smart Chain, and
Solana to mitigate risk and instil trust and transparency into the vibrant crypto community. They have also reviewed and secure the
smart contracts of 1Inch, POA Network, Unicrypt, Amun, Furucombo among numerous other top DeFi projects.
Chainsulting currently secures $100 billion in user funds locked in multiple DeFi protocols. The team behind the leading audit firm relies
on their robust technical know-how in the blockchain sector to deliver top-notch smart contract audit solutions, tailored to the clients'
evolving business needs.
Check our website for further information: https://chainsulting.de

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