How to Analyze Bitcoin L2 DeFi Protocols with Ollama: Smart Contract Evaluation Guide

# Install Ollama (macOS/Linux)
curl -fsSL https://ollama.ai/install.sh | sh

# Download code analysis models
ollama pull codellama:13b-instruct
ollama pull deepseek-coder:6.7b-instruct

# Verify installation
ollama list

# Create project directory
mkdir bitcoin-l2-analysis
cd bitcoin-l2-analysis

# Initialize analysis scripts
touch protocol_analyzer.py
touch contract_reviewer.py
touch security_scanner.py

# protocol_analyzer.py
import subprocess
import json

def analyze_protocol_architecture(contract_files):
    """Analyze protocol architecture using Ollama"""
    
    prompt = f"""
    Analyze this Bitcoin L2 DeFi protocol architecture.
    Focus on:
    1. Bitcoin peg mechanisms
    2. Cross-chain bridge security
    3. Token wrapping/unwrapping flows
    4. Consensus integration points
    
    Contract files: {contract_files}
    
    Provide a structured security assessment.
    """
    
    # Call Ollama with the prompt
    result = subprocess.run([
        'ollama', 'run', 'codellama:13b-instruct', prompt
    ], capture_output=True, text=True)
    
    return result.stdout

# Example usage
contracts = ["bridge_contract.sol", "token_wrapper.sol", "staking_pool.sol"]
architecture_analysis = analyze_protocol_architecture(contracts)
print(architecture_analysis)

# contract_reviewer.py
def review_smart_contract(contract_code, contract_type):
    """Deep dive into smart contract security"""
    
    review_prompt = f"""
    Review this {contract_type} smart contract for Bitcoin L2 DeFi:
    
    {contract_code}
    
    Check for:
    1. Bitcoin UTXO handling errors
    2. Reentrancy vulnerabilities
    3. Integer overflow/underflow
    4. Access control issues
    5. State manipulation attacks
    6. Cross-chain message validation
    
    Rate severity: CRITICAL, HIGH, MEDIUM, LOW
    Provide specific line numbers and fix recommendations.
    """
    
    result = subprocess.run([
        'ollama', 'run', 'deepseek-coder:6.7b-instruct', review_prompt
    ], capture_output=True, text=True)
    
    return parse_vulnerability_report(result.stdout)

def parse_vulnerability_report(raw_output):
    """Structure the vulnerability report"""
    # Parse Ollama output into structured format
    vulnerabilities = []
    
    # Implementation depends on your specific parsing needs
    # This is a simplified example
    
    return {
        'critical_issues': [],
        'high_priority': [],
        'medium_priority': [],
        'recommendations': []
    }

# security_scanner.py
def scan_bitcoin_l2_vulnerabilities(protocol_contracts):
    """Scan for Bitcoin L2-specific vulnerabilities"""
    
    bitcoin_l2_prompt = f"""
    Analyze these Bitcoin L2 DeFi contracts for:
    
    1. **Peg-in/Peg-out Vulnerabilities**:
       - Double spending attacks
       - Time-lock bypass
       - Merkle proof manipulation
    
    2. **Layer 2 Consensus Issues**:
       - Sequencer centralization risks
       - Data availability problems
       - Challenge period exploitation
    
    3. **Bitcoin UTXO Model Conflicts**:
       - Account model assumptions
       - State transition errors
       - UTXO commitment issues
    
    Contracts: {protocol_contracts}
    
    Provide specific exploit scenarios and mitigation strategies.
    """
    
    result = subprocess.run([
        'ollama', 'run', 'codellama:13b-instruct', bitcoin_l2_prompt
    ], capture_output=True, text=True)
    
    return result.stdout

# Generate comprehensive security report
def generate_security_report(protocol_name, analysis_results):
    """Create a comprehensive security assessment"""
    
    report = {
        'protocol': protocol_name,
        'analysis_date': '2025-07-15',
        'overall_risk': calculate_risk_score(analysis_results),
        'critical_findings': analysis_results.get('critical_issues', []),
        'recommendations': analysis_results.get('recommendations', []),
        'bitcoin_l2_specific_risks': analysis_results.get('l2_risks', [])
    }
    
    return report

def consensus_analysis(contract_code):
    """Run analysis with multiple models for consensus"""
    
    models = [
        'codellama:13b-instruct',
        'deepseek-coder:6.7b-instruct',
        'starcoder:7b-instruct'
    ]
    
    results = []
    for model in models:
        analysis = run_model_analysis(contract_code, model)
        results.append(analysis)
    
    # Combine results and identify consensus vulnerabilities
    consensus_issues = find_consensus_vulnerabilities(results)
    return consensus_issues

def find_consensus_vulnerabilities(analysis_results):
    """Identify vulnerabilities found by multiple models"""
    # Implementation for consensus logic
    pass

# Create custom modelfile for Bitcoin L2 analysis
cat > bitcoin-l2-analyzer.modelfile << EOF
FROM codellama:13b-instruct

PARAMETER temperature 0.1
PARAMETER top_p 0.9

SYSTEM """
You are a Bitcoin Layer 2 DeFi security expert.
Focus on Bitcoin-specific vulnerabilities including:
- UTXO model conflicts
- Cross-chain bridge security
- Layer 2 consensus mechanisms
- Bitcoin script limitations

Always provide specific, actionable security recommendations.
"""
EOF

# Build custom model
ollama create bitcoin-l2-analyzer -f bitcoin-l2-analyzer.modelfile

# monitor.py
import schedule
import time
from git import Repo

def monitor_protocol_changes():
    """Monitor Git repository for protocol changes"""
    
    repo = Repo('/path/to/protocol/repo')
    
    # Check for new commits
    origin = repo.remotes.origin
    origin.fetch()
    
    commits_behind = list(repo.iter_commits('HEAD..origin/main'))
    
    if commits_behind:
        print(f"Found {len(commits_behind)} new commits")
        
        # Analyze changed contracts
        for commit in commits_behind:
            changed_files = [f.a_path for f in commit.diff(commit.parents[0])]
            contract_files = [f for f in changed_files if f.endswith('.sol')]
            
            if contract_files:
                analyze_contract_changes(contract_files, commit)

def analyze_contract_changes(files, commit):
    """Analyze security implications of contract changes"""
    
    change_prompt = f"""
    Analyze security implications of these contract changes:
    
    Commit: {commit.hexsha}
    Changed files: {files}
    
    Focus on:
    1. New attack vectors introduced
    2. Security regressions
    3. Bitcoin L2 compatibility issues
    
    Provide risk assessment and monitoring recommendations.
    """
    
    # Run Ollama analysis
    result = subprocess.run([
        'ollama', 'run', 'bitcoin-l2-analyzer', change_prompt
    ], capture_output=True, text=True)
    
    # Send alerts if critical issues found
    if 'CRITICAL' in result.stdout:
        send_security_alert(result.stdout)

# Schedule monitoring
schedule.every(1).hours.do(monitor_protocol_changes)

while True:
    schedule.run_pending()
    time.sleep(60)

def validate_analysis_results(analysis_output):
    """Validate Ollama analysis results"""
    
    validation_checks = [
        check_vulnerability_classifications(),
        verify_code_references(),
        validate_fix_recommendations(),
        assess_bitcoin_l2_specificity()
    ]
    
    validation_score = sum(validation_checks) / len(validation_checks)
    return validation_score > 0.8  # 80% confidence threshold

def check_vulnerability_classifications():
    """Ensure vulnerability classifications are accurate"""
    # Implementation for classification validation
    pass

def comprehensive_analysis_pipeline(protocol_contracts):
    """Complete analysis pipeline combining multiple tools"""
    
    results = {
        'ollama_analysis': run_ollama_analysis(protocol_contracts),
        'static_analysis': run_slither_analysis(protocol_contracts),
        'formal_verification': run_formal_verification(protocol_contracts),
        'gas_analysis': analyze_gas_optimization(protocol_contracts)
    }
    
    # Combine results for comprehensive report
    comprehensive_report = merge_analysis_results(results)
    return comprehensive_report

// Example Lightning Pool contract
pragma solidity ^0.8.19;

contract LightningPool {
    mapping(address => uint256) public balances;
    mapping(bytes32 => bool) public usedPreimages;
    
    function deposit(bytes32 commitment) external payable {
        require(msg.value > 0, "Invalid deposit");
        balances[msg.sender] += msg.value;
        // Missing commitment validation - VULNERABILITY
    }
    
    function withdraw(bytes32 preimage, uint256 amount) external {
        bytes32 hash = sha256(abi.encode(preimage));
        require(!usedPreimages[hash], "Preimage already used");
        require(balances[msg.sender] >= amount, "Insufficient balance");
        
        usedPreimages[hash] = true;
        balances[msg.sender] -= amount;
        payable(msg.sender).transfer(amount);
        // Missing reentrancy protection - VULNERABILITY
    }
}

# Optimize model performance
ollama run codellama:13b-instruct --verbose

# Check system resources
htop
nvidia-smi  # If using GPU acceleration

# Adjust model parameters
ollama run codellama:13b-instruct --parameter temperature 0.1

def analyze_large_protocol(contract_directory):
    """Efficiently analyze protocols with many contracts"""
    
    # Prioritize critical contracts
    critical_contracts = identify_critical_contracts(contract_directory)
    
    # Batch analysis for efficiency
    for batch in chunk_contracts(critical_contracts, batch_size=5):
        batch_analysis = analyze_contract_batch(batch)
        save_analysis_results(batch_analysis)
    
    # Generate summary report
    generate_protocol_summary()

def generate_markdown_report(analysis_results):
    """Generate markdown security report"""
    
    report_template = """
# Bitcoin L2 DeFi Protocol Security Analysis

## Executive Summary
{executive_summary}

## Critical Vulnerabilities
{critical_vulnerabilities}

## Recommendations
{recommendations}

## Technical Details
{technical_details}
"""
    
    report = report_template.format(
        executive_summary=create_executive_summary(analysis_results),
        critical_vulnerabilities=format_vulnerabilities(analysis_results['critical']),
        recommendations=format_recommendations(analysis_results['recommendations']),
        technical_details=format_technical_details(analysis_results)
    )
    
    return report

# Distributed analysis setup
def setup_distributed_analysis():
    """Setup analysis across multiple machines"""
    
    analysis_nodes = [
        'analysis-node-1.local',
        'analysis-node-2.local', 
        'analysis-node-3.local'
    ]
    
    for node in analysis_nodes:
        deploy_ollama_instance(node)
        configure_analysis_pipeline(node)
    
    setup_load_balancer(analysis_nodes)