Odra - Liquid Staking - Casper Association

Prepared by:

HALBORN

Last Updated 05/27/2025

Date of Engagement: April 21st, 2025 - April 28th, 2025

Summary

100% of all REPORTED Findings have been addressed

All findings

Critical

High

Medium

Low

Informational

1. Introduction
2. Assessment summary
3. Test approach and methodology
4. Risk methodology
5. Scope
6. Assessment summary & findings overview
7. Findings & Tech Details

7.1 Validator removal bypasses fee collection and breaks delegation tracking
7.2 Admin can extract backed cspr and devalue scspr through stake manipulation
7.3 Contract lacks mechanism to transfer ownership after deployment
7.4 Lack of validation on fee percentage allows inflation abuse
7.5 Users can delegate cspr without receiving scspr
7.6 Predictable validator selection due to weak randomness
7.7 Lack of error handling when adding an already registered validator
7.8 Unused constant min_stake and lack of validation allow unsafe initialization
7.9 Unmodifiable claim time prevents governance from adapting unstaking delays in the future
7.10 Incorrect scspr-to-cspr conversion when no backing stake or supply exists

1. Introduction

Odra engaged Halborn to conduct a security assessment of the Liquid Staking contract, beginning on April 21st, 2025 and ending on April 28th, 2025. This security assessment was scoped to the smart contracts in the liquid-staking-contracts GitHub repository.

This project implements a Liquid Staking protocol for CSPR on the Casper blockchain. It allows users to stake CSPR and receive a fungible token, sCSPR, which represents their share of the staked assets and can be used freely while earning rewards.

2. Assessment Summary

The team at Halborn assigned a full-time security engineer to verify the security of the smart contracts. 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 successfully addressed by the Odra team. The main ones were the following:

Ensure remove_validator calls collect_fee() before undelegation and updates last_recorded_delegated_amount after.
Expose a secure admin-only ownership transfer function, either via delegation or a custom wrapper.
Enforce a maximum fee_percentage (e.g., 20%) and revert in init() if it exceeds 10,000 basis points (100%).
Restrict withdraw_from_the_contract to only allow withdrawal of CSPR explicitly contributed by the add_to_the_pool function, and enforce automatic or mandatory re-delegation after any undelegation triggered by remove_validator or remove_from_the_pool.

3. Test Approach and Methodology

Halborn performed a combination of the manual view of the code and automated security testing to balance efficiency, timeliness, practicality, and accuracy regarding the scope of the smart contract assessment. While manual testing is recommended to uncover flaws in logic, process, and implementation, automated testing techniques help enhance the coverage of smart contracts. They 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, purpose, and use of the platform.
Manual code read and walk through.
Manual Assessment of use and safety for the critical Rust variables and functions in scope to identify any arithmetic related vulnerability classes.
Cross contract call controls.
Architecture related logical controls.
Scanning of Rust files for vulnerabilities (cargo audit)
Test analysis using the BDD system deployed with Cucumber tool.

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: liquid-staking-contracts

(b) Assessed Commit ID: 3deeab6

liquid-staking-contracts/src/events.rs
liquid-staking-contracts/src/token.rs
liquid-staking-contracts/src/lib.rs

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

Remediation Commit ID:

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
Validator removal bypasses fee collection and breaks delegation tracking	Medium	Solved - 05/21/2025
Admin can extract backed CSPR and devalue sCSPR through stake manipulation	Low	Solved - 05/14/2025
Contract lacks mechanism to transfer ownership after deployment	Low	Solved - 05/07/2025
Lack of validation on fee percentage allows inflation abuse	Low	Solved - 05/05/2025
Users can delegate CSPR without receiving sCSPR	Informational	Solved - 05/06/2025
Predictable validator selection due to weak randomness	Informational	Solved - 05/07/2025
Lack of error handling when adding an already registered validator	Informational	Solved - 05/05/2025
Unused constant MIN_STAKE and lack of validation allow unsafe initialization	Informational	Solved - 05/05/2025
Unmodifiable claim time prevents governance from adapting unstaking delays in the future	Informational	Solved - 05/05/2025
Incorrect sCSPR-to-CSPR conversion when no backing stake or supply exists	Informational	Solved - 05/06/2025

https://github.com/casper-ecosystem/liquid-staking-contracts/commit/45e00e99b3d35b145593d8965da02c58b3590591

Halborn strongly recommends conducting a follow-up assessment of the project either within six months or immediately following any material changes to the codebase, whichever comes first. This approach is crucial for maintaining the project’s integrity and addressing potential vulnerabilities introduced by code modifications.

1. Introduction
2. Assessment summary
3. Test approach and methodology
4. Risk methodology
5. Scope
6. Assessment summary & findings overview
7. Findings & Tech Details

7.1 Validator removal bypasses fee collection and breaks delegation tracking
7.2 Admin can extract backed cspr and devalue scspr through stake manipulation
7.3 Contract lacks mechanism to transfer ownership after deployment
7.4 Lack of validation on fee percentage allows inflation abuse
7.5 Users can delegate cspr without receiving scspr
7.6 Predictable validator selection due to weak randomness
7.7 Lack of error handling when adding an already registered validator
7.8 Unused constant min_stake and lack of validation allow unsafe initialization
7.9 Unmodifiable claim time prevents governance from adapting unstaking delays in the future
7.10 Incorrect scspr-to-cspr conversion when no backing stake or supply exists

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Odra - Liquid Staking

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