Treasury Vesting - BlockDAG

Prepared by:

HALBORN

Last Updated Unknown date

Date of Engagement: February 5th, 2025 - February 7th, 2025

Summary

100% of all REPORTED Findings have been addressed

All findings

Critical

High

Medium

Low

Informational

1. Introduction

BlockDAG engaged Halborn to conduct a security assessment on smart contracts beginning on February 5th, 2025 and ending on February 7th, 2025. The security assessment was scoped to the smart contracts provided to the Halborn team. Commit hashes and further details can be found in the Scope section of this report.

2. Assessment Summary

The team at Halborn dedicated 3 days for the engagement and assigned one full-time security engineer to evaluate the security of the smart contract.

The security engineer is a blockchain and smart-contract security expert with advanced penetration testing, smart-contract hacking, and deep knowledge of multiple blockchain protocols

The purpose of this assessment is to:

Ensure that smart contract functions operate as intended.
Identify potential security issues with the smart contracts.

In summary, Halborn identified some improvements to reduce the likelihood and impact of risks, which were all addressed by the BlockDAG team. The main ones were the following:

Implement Correct logic for token distribution
Ensure accurate accounting for multi sig approvals
Strengthening validation during token allocation
Implement proper access control on release functions.
Add an expiry mechanism to time-lock operations.
Add explicit category validation at the start of the executeAddCategory function.
Disable the initializer in the implementation contract.

3. Test Approach and Methodology

Halborn performed a combination of manual, semi-automated and automated security testing to balance efficiency, timeliness, practicality, and accuracy regarding the scope of this assessment. While manual testing is recommended to uncover flaws in logic, process, and implementation; automated testing techniques help enhance coverage of the code and can quickly identify items that do not follow security best practices. The following phases and associated tools were used throughout the term of the assessment:

Research into architecture and purpose.
Smart contract manual code review and walk-through.
Manual assessment of use and safety for the critical Solidity variables and functions in scope to identify any vulnerability classes
Manual testing by custom scripts.
Static Analysis of security for scoped contract, and imported functions. (Slither)
Local deployment and testing ( Foundry)

4. RISK METHODOLOGY

Every vulnerability and issue observed by Halborn is ranked based on two sets of Metrics and a Severity Coefficient. This system is inspired by the industry standard Common Vulnerability Scoring System.

The two Metric sets are: Exploitability and Impact. Exploitability captures the ease and technical means by which vulnerabilities can be exploited and Impact describes the consequences of a successful exploit.

The Severity Coefficients is designed to further refine the accuracy of the ranking with two factors: Reversibility and Scope. These capture the impact of the vulnerability on the environment as well as the number of users and smart contracts affected.

The final score is a value between 0-10 rounded up to 1 decimal place and 10 corresponding to the highest security risk. This provides an objective and accurate rating of the severity of security vulnerabilities in smart contracts.

The system is designed to assist in identifying and prioritizing vulnerabilities based on their level of risk to address the most critical issues in a timely manner.

4.1 EXPLOITABILITY

Attack Origin (AO):

Captures whether the attack requires compromising a specific account.

Attack Cost (AC):

Captures the cost of exploiting the vulnerability incurred by the attacker relative to sending a single transaction on the relevant blockchain. Includes but is not limited to financial and computational cost.

Attack Complexity (AX):

Describes the conditions beyond the attacker’s control that must exist in order to exploit the vulnerability. Includes but is not limited to macro situation, available third-party liquidity and regulatory challenges.

Metrics:

EXPLOITABILITY METRIC ( $m_e$ )	METRIC VALUE	NUMERICAL VALUE
Attack Origin (AO)	Arbitrary (AO:A) Specific (AO:S)	1 0.2
Attack Cost (AC)	Low (AC:L) Medium (AC:M) High (AC:H)	1 0.67 0.33
Attack Complexity (AX)	Low (AX:L) Medium (AX:M) High (AX:H)	1 0.67 0.33

Exploitability

E

is calculated using the following formula:

$E = \prod m_e$

4.2 IMPACT

Confidentiality (C):

Measures the impact to the confidentiality of the information resources managed by the contract due to a successfully exploited vulnerability. Confidentiality refers to limiting access to authorized users only.

Integrity (I):

Measures the impact to integrity of a successfully exploited vulnerability. Integrity refers to the trustworthiness and veracity of data stored and/or processed on-chain. Integrity impact directly affecting Deposit or Yield records is excluded.

Availability (A):

Measures the impact to the availability of the impacted component resulting from a successfully exploited vulnerability. This metric refers to smart contract features and functionality, not state. Availability impact directly affecting Deposit or Yield is excluded.

Deposit (D):

Measures the impact to the deposits made to the contract by either users or owners.

Yield (Y):

Measures the impact to the yield generated by the contract for either users or owners.

Metrics:

IMPACT METRIC ( $m_I$ )	METRIC VALUE	NUMERICAL VALUE
Confidentiality (C)	None (C:N) Low (C:L) Medium (C:M) High (C:H) Critical (C:C)	0 0.25 0.5 0.75 1
Integrity (I)	None (I:N) Low (I:L) Medium (I:M) High (I:H) Critical (I:C)	0 0.25 0.5 0.75 1
Availability (A)	None (A:N) Low (A:L) Medium (A:M) High (A:H) Critical (A:C)	0 0.25 0.5 0.75 1
Deposit (D)	None (D:N) Low (D:L) Medium (D:M) High (D:H) Critical (D:C)	0 0.25 0.5 0.75 1
Yield (Y)	None (Y:N) Low (Y:L) Medium (Y:M) High (Y:H) Critical (Y:C)	0 0.25 0.5 0.75 1

Impact

I

is calculated using the following formula:

$I = max(m_I) + \frac{\sum{m_I} - max(m_I)}{4}$

4.3 SEVERITY COEFFICIENT

Reversibility (R):

Describes the share of the exploited vulnerability effects that can be reversed. For upgradeable contracts, assume the contract private key is available.

Scope (S):

Captures whether a vulnerability in one vulnerable contract impacts resources in other contracts.

Metrics:

SEVERITY COEFFICIENT ( $C$ )	COEFFICIENT VALUE	NUMERICAL VALUE
Reversibility ( $r$ )	None (R:N) Partial (R:P) Full (R:F)	1 0.5 0.25
Scope ( $s$ )	Changed (S:C) Unchanged (S:U)	1.25 1

Severity Coefficient

C

is obtained by the following product:

$C = rs$

The Vulnerability Severity Score

S

is obtained by:

$S = min(10, EIC * 10)$

The score is rounded up to 1 decimal places.

Severity	Score Value Range
Critical	9 - 10
High	7 - 8.9
Medium	4.5 - 6.9
Low	2 - 4.4
Informational	0 - 1.9

5. SCOPE

REPOSITORY

(a) Repository: BlockDAG Private Repository

(b) Assessed Commit ID: V2

contracts/TreasuryVesting.sol

Out-of-Scope: Third party dependencies and economic attacks.

Out-of-Scope: New features/implementations after the remediation commit IDs.

6. Assessment Summary & Findings Overview

Critical

High

Medium

Low

Informational

Security analysis	Risk level	Remediation Date
No Token Distribution in BatchRelease Due to Premature State Updates	Critical	Solved - 02/18/2025
Total Amount Limit Can Be Bypassed During Allocations	Medium	Solved - 02/12/2025
Missing Access Control on Token Release Functions	Medium	Solved - 02/12/2025
Cleanup Reverts for Pause/Unpause Approvals	Medium	Solved - 02/18/2025
Double-Counting in Multi-Signature Approval for Users with Multiple Roles	Medium	Solved - 02/18/2025
Operator Approvals Equal to Admin Approvals	Medium	Solved - 02/18/2025
Timelock Operations Without Expiry	Low	Solved - 02/12/2025
Missing Category Validation	Low	Solved - 02/12/2025
Initializer Not Disabled	Low	Solved - 02/12/2025
Insufficient Validation Of Vesting Duration	Informational	Solved - 02/12/2025
Centralization Risks	Informational	Solved - 02/12/2025
Redundant Constants	Informational	Solved - 02/18/2025

7. Findings & Tech Details

7.1 No Token Distribution in BatchRelease Due to Premature State Updates

Critical

Description

Proof of Concept

BVSS

AO:A/AC:L/AX:L/R:N/S:U/C:N/A:C/I:H/D:N/Y:L (10.0)

Recommendation

Remediation Comment

7.2 Total Amount Limit Can Be Bypassed During Allocations

Medium

Description

Description

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Treasury Vesting

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