Reservoir Protocol - lz-bridge Audit | FortunaFi

Summary

100% of all REPORTED Findings have been addressed

About this report

Assessment Type

Assurance Assessment

Date of Engagement

December 10th, 2024 - December 11th, 2024

Source Code

lz-bridge

Assessed Commit ID

4d1900c

Severity Breakdown

0Acknowledged
0Risk Accepted
2Solved
2All Findings

Critical0
High0
Medium1
- 1Solved
Low1
- 1Solved
Informational0

Introduction#

FortunaFi engaged Halborn to conduct a security assessment on their smart contracts revisions started on December 10th, 2024 and ending on December 11th, 2024. 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.

Assessment Summary#

The team at Halborn was provided 2 days for the engagement and assigned a 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 mostly addressed by the FortunaFi team. The main ones were the following:

Enfore msg.value on sender and receiver side.
Implement some admin-restricted functions for easier configuration.

Test Approach and Methodology#

Halborn performed a combination of manual 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 code coverage and quickly identify items that do not follow the security best practices. The following phases and associated tools were used during the assessment:

Research into architecture and purpose.
Smart contract manual code review and walkthrough.
Graphing out functionality and contract logic/connectivity/functions. (solgraph,draw.io)
Manual assessment of use and safety for the critical Solidity variables and functions in scope to identify any arithmetic related vulnerability classes.
Manual testing by custom scripts.
Static Analysis of security for scoped contract, and imported functions. (Slither)
Testnet deployment. ( Hardhat,Foundry)

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)	1
Attack Origin (AO)	Specific (AO:S)	0.2
Attack Cost (AC)	Low (AC:L)	1
	Medium (AC:M)	0.67
	High (AC:H)	0.33
Attack Complexity (AX)	Low (AX:L)	1
	Medium (AX:M)	0.67
	High (AX:H)	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)	0
	Low (C:L)	0.25
	Medium (C:M)	0.5
	High (C:H)	0.75
	Critical (C:C)	1
Integrity (I)	None (I:N)	0
	Low (I:L)	0.25
	Medium (I:M)	0.5
	High (I:H)	0.75
	Critical (I:C)	1
Availability (A)	None (A:N)	0
	Low (A:L)	0.25
	Medium (A:M)	0.5
	High (A:H)	0.75
	Critical (A:C)	1
Deposit (D)	None (D:N)	0
	Low (D:L)	0.25
	Medium (D:M)	0.5
	High (D:H)	0.75
	Critical (D:C)	1
Yield (Y)	None (Y:N)	0
	Low (Y:L)	0.25
	Medium (Y:M)	0.5
	High (Y:H)	0.75
	Critical (Y:C)	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)	1
	Partial (R:P)	0.5
	Full (R:F)	0.25
Scope ( $s$ )	Changed (S:C)	1.25
Scope ( $s$ )	Unchanged (S:U)	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.

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

Scope#

(a) Repository:lz-bridge

(b) Assessed Commit ID:4d1900cab96f9ecd5c484a957795d688d3bda1f5

6 files

ConstantsLib.sol

solidity

ErrorsLib.sol

solidity

EventsLib.sol

solidity

RusdMintBridge.sol

solidity

RusdOft.sol

solidity

RusdOftAdapter.sol

solidity

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

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

Assessment Summary & Findings Overview#

#	Title	Severity	Score	Status
HAL-01	Lack of msg.value Validation in RusdMintBridge	Medium	5.0	Solved12/11/2024
HAL-02	Outdated LayerZero Dependencies Create Maintainability Risk	Low	2.5	Solved12/11/2024

Findings & Tech Details#

HAL-01Solved

Lack of msg.value Validation in RusdMintBridge

Medium

5.0AO:A/AC:L/AX:L/C:N/I:M/A:N/D:N/Y:N/R:N/S:UAO:A/AC:L/AX:L/C:N/I:M/A:N/D:N/Y:N/R:N/S:U

Description

Recommendation

References

reservoir-protocol/lz-bridge/contracts/RusdMintBridge.sol#L46

Remediation Comment

HAL-02Solved

Outdated LayerZero Dependencies Create Maintainability Risk

Low

2.5AO:A/AC:L/AX:L/C:N/I:L/A:N/D:N/Y:N/R:N/S:UAO:A/AC:L/AX:L/C:N/I:L/A:N/D:N/Y:N/R:N/S:U

Description

Recommendation

References

reservoir-protocol/lz-bridge/package.json#L32

Remediation Comment

8. Automated Testing#

Disclaimer#

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.