The Elys Network Team engaged Halborn to conduct a security assessment on their cosmos appchain modules, beginning on 02/02/2024 and ending on 03/15/2024. The security assessment was scoped to the sections of code that pertain to the modules of app chain. Commit hashes and further details can be found in the Scope section of this report.

2. Assessment Summary

Halborn was provided 12 weeks for the engagement and assigned 1 full-time security engineer to review the security of the modules in scope. The engineer is a blockchain and smart contract security expert with advanced penetration testing and smart contract hacking skills, and deep knowledge of multiple blockchain protocols.

The purpose of the assessment is to:

- Ensure that the AppChain Modules operate as intended.

- Identify potential security issues with the custom modules used in the Elys Chain.

In summary, Halborn identified some security issues that were mostly addressed by the Elys Network team.

3. Test Approach and Methodology

Halborn performed a combination of manual and automated security testing to balance efficiency, timeliness, practicality, and accuracy in regard to the scope of the custom modules. While manual testing is recommended to uncover flaws in logic, process, and implementation; automated testing techniques help enhance coverage of structures 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.

- Static Analysis of security for scoped repository, and imported functions. (e.g., staticcheck, gosec, unconvert, codeql, ineffassign and semgrep)

- Manual Assessment for discovering security vulnerabilities on the codebase.

- Ensuring the correctness of the codebase.

- Dynamic Analysis of files and modules related to the Elys Network Modules.

3.1 Out-of-scope

External libraries and financial-related attacks.
New features/implementations after/with the remediation commit IDs
Changes that occur outside of the scope of PRs.

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

REPOSITORIES

(a) Repository: elys

(b) Assessed Commit ID: 064f047

parameter
assetprofile
transferhook

↓ Expand ↓

Out-of-Scope: Third party dependencies., Economical/Financial Attacks

(a) Repository: elys

(b) Assessed Commit ID: 7a20f78

incentive
leaverageLP
tokenomics

↓ Expand ↓

Out-of-Scope: Third party dependencies., Economical/Financial 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
Lack of Access Control in RequestBandPrice Function	Critical	Solved - 03/11/2024
Incorrect Calculation of Minimum Collateral Due to Ignored Decimal Precision	Critical	Solved - 03/11/2024
Absence of Creation Fee in CreatePool Method Leading to Spamming Attacks	High	Solved - 04/04/2024
Inadequate Handling Of Large Webassembly (Wasm) Files On The System Leads To Dos	High	Solved - 03/11/2024
Absence of IBC Channel Verification in UpdateEntry Function	Medium	Solved - 03/11/2024
Lack of Broker Address Validation in MsgUpdateBrokerAddress's ValidateBasic Function	Medium	Solved - 03/11/2024
Implement TWAP for More Accurate Price Retrieval in Keeper Methods	Medium	Risk Accepted
JoinPoolNoSwap Exhibits Discrepancy Between Expected and Actual Calculated Share Outputs	Low	Risk Accepted
Bulk Coin Sends	Low	Risk Accepted
Lack of spec on the modules	Low	Risk Accepted
Missing Asset Whitelisting/Denom Check in FeedPrice Method	Low	Risk Accepted
Insufficient Validation in MsgCreateEntry, MsgUpdateEntry, and MsgDeleteEntry	Low	Risk Accepted
Vulnerabilities in Cosmos SDK v0.47.4 Affecting Elys Network	Low	Risk Accepted
Utilize Block Height in Price Feeding	Low	Solved - 04/07/2024
Potential Denial of Service (DoS) Vulnerability in PowApprox Function	Low	Risk Accepted
Increase Precision of Initial Pool Shares to Match Industry Standards	Informational	Solved - 04/07/2024
Missing Usage Description For All Transaction Commands Cli	Informational	Acknowledged
Implement Fee Market Integrated into Consensus Layer	Informational	Acknowledged
Lack OF IBC Rate-Limitting Implementation	Informational	Acknowledged
Arbitrary Token Transfer Leads to Chain Halt	Informational	Acknowledged
Keep Slippage Expiration Date as a Governance Parameter	Informational	Solved - 04/07/2024
Silent Error in RecordWithdrawValidatorCommission Function	Informational	Acknowledged

7. Findings & Tech Details

7.1 Lack of Access Control in RequestBandPrice Function

Critical

Description

Proof of Concept

BVSS

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

Recommendation

7.2 Incorrect Calculation of Minimum Collateral Due to Ignored Decimal Precision

Critical

Description

BVSS

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

Recommendation

7.3 Absence of Creation Fee in CreatePool Method Leading to Spamming Attacks

High

Description

Proof of Concept

BVSS

AO:A/AC:M/AX:M/C:N/I:C/A:C/D:N/Y:N/R:N/S:C (7.0)

Recommendation

7.4 Inadequate Handling Of Large Webassembly (Wasm) Files On The System Leads To Dos

High

Description

Proof of Concept

BVSS

AO:A/AC:L/AX:L/C:N/I:L/A:L/D:N/Y:N/R:P/S:C (1.9)

Recommendation

3.1 Out-of-scope

4. Risk methodology
5. Scope
6. Assessment summary & findings overview
7. Findings & Tech Details

7.1 Lack of access control in requestbandprice function
7.2 Incorrect calculation of minimum collateral due to ignored decimal precision
7.3 Absence of creation fee in createpool method leading to spamming attacks
7.4 Inadequate handling of large webassembly (wasm) files on the system leads to dos
7.5 Absence of ibc channel verification in updateentry function
7.6 Lack of broker address validation in msgupdatebrokeraddress's validatebasic function
7.7 Implement twap for more accurate price retrieval in keeper methods
7.8 Joinpoolnoswap exhibits discrepancy between expected and actual calculated share outputs
7.9 Bulk coin sends
7.10 Lack of spec on the modules
7.11 Missing asset whitelisting/denom check in feedprice method
7.12 Insufficient validation in msgcreateentry, msgupdateentry, and msgdeleteentry
7.13 Vulnerabilities in cosmos sdk v0.47.4 affecting elys network
7.14 Utilize block height in price feeding
7.15 Potential denial of service (dos) vulnerability in powapprox function
7.16 Increase precision of initial pool shares to match industry standards
7.17 Missing usage description for all transaction commands cli
7.18 Implement fee market integrated into consensus layer
7.19 Lack of ibc rate-limitting implementation
7.20 Arbitrary token transfer leads to chain halt
7.21 Keep slippage expiration date as a governance parameter
7.22 Silent error in recordwithdrawvalidatorcommission function

Elys Modules

Elys Network

Table of Contents

1. Introduction

2. Assessment Summary

3. Test Approach and Methodology

3.1 Out-of-scope

4. RISK METHODOLOGY

4.1 EXPLOITABILITY

Attack Origin (AO):

Attack Cost (AC):

Attack Complexity (AX):

Metrics:

4.2 IMPACT

Confidentiality (C):

Integrity (I):

Availability (A):

Deposit (D):

Yield (Y):

Metrics:

4.3 SEVERITY COEFFICIENT

Reversibility (R):

Scope (S):

Metrics:

5. SCOPE

6. Assessment Summary & Findings Overview

7. Findings & Tech Details

7.1 Lack of Access Control in RequestBandPrice Function

Description

Proof of Concept

BVSS

Recommendation

7.2 Incorrect Calculation of Minimum Collateral Due to Ignored Decimal Precision

Description

BVSS

Recommendation

7.3 Absence of Creation Fee in CreatePool Method Leading to Spamming Attacks

Description

Proof of Concept

BVSS

Recommendation

7.4 Inadequate Handling Of Large Webassembly (Wasm) Files On The System Leads To Dos

Description

Proof of Concept

BVSS

Recommendation

7.5 Absence of IBC Channel Verification in UpdateEntry Function

Description

BVSS

Recommendation

7.6 Lack of Broker Address Validation in MsgUpdateBrokerAddress's ValidateBasic Function

Description

BVSS

Recommendation

7.7 Implement TWAP for More Accurate Price Retrieval in Keeper Methods

Description

BVSS

Recommendation

7.8 JoinPoolNoSwap Exhibits Discrepancy Between Expected and Actual Calculated Share Outputs

Description

BVSS

Recommendation

7.9 Bulk Coin Sends

Description

BVSS

Recommendation

7.10 Lack of spec on the modules

Description

BVSS

Recommendation

7.11 Missing Asset Whitelisting/Denom Check in FeedPrice Method

Description

BVSS

Recommendation

7.12 Insufficient Validation in MsgCreateEntry, MsgUpdateEntry, and MsgDeleteEntry

Description

BVSS

Recommendation

7.13 Vulnerabilities in Cosmos SDK v0.47.4 Affecting Elys Network

Description