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Reservoir Protocol - wsrUSD + Rebalance - FortunaFi

Prepared by:

Halborn Logo

HALBORN

Last Updated 03/04/2026

Date of Engagement: March 31st, 2025 - April 2nd, 2025

Summary

100% of all REPORTED Findings have been addressed

All findings

12

Critical

0

High

0

Medium

1

Low

1

Informational

10

Table of Contents

1. Introduction

FortunaFi engaged Halborn to conduct a security assessment on their smart contracts beginning on March 31st, 2025 and ending on April 2nd, 2025. The security assessment was scoped to the smart contracts provided to Halborn. Commit hashes and further details can be found in the Scope section of this report.


The FortunaFi codebase in scope consists of smart contracts responsible for token migration functionality, liquidity rebalancing mechanisms, and an interest-bearing savings token implementation based on the ERC4626 standard.

2. Assessment Summary

Halborn was provided 3 days for the engagement and assigned 1 full-time security engineer to review the security of the smart contracts 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:

    • Identify potential security issues within the smart contracts.

    • Ensure that smart contract functionality operates as intended.


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

    • Apply the scaling factor consistently to the shortfall_ value in the _maxRebalance() function.

    • Consider adding a whitelist of trusted adapters and verifying that the provided adapter is whitelisted on calls to the rebalance() function.

    • Implement OpenZeppelin's SafeERC20 library to wrap all ERC20 token interactions.


3. Test Approach and Methodology

Halborn performed a combination of manual review of the code and automated security testing to balance efficiency, timeliness, practicality, and accuracy in regard to 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 smart contracts 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, purpose and use of the platform.

    • Smart contract manual code review and walkthrough to identify any logic issue.

    • Thorough assessment of safety and usage of critical Solidity variables and functions in scope that could led to arithmetic related vulnerabilities.

    • Local testing with custom scripts (Foundry).

    • Fork testing against main networks (Foundry).

    • Static analysis of security for scoped contract, and imported functions (Slither).


4. Static Analysis Report

4.1 Description

Halborn used automated testing techniques to enhance the coverage of certain areas of the smart contracts in scope. Among the tools used was Slither, a Solidity static analysis framework. After Halborn verified the smart contracts in the repository and was able to compile them correctly into their abis and binary format, Slither was run against the contracts. This tool can statically verify mathematical relationships between Solidity variables to detect invalid or inconsistent usage of the contracts' APIs across the entire code-base.


The security team assessed all findings identified by the Slither software, however, findings with related to external dependencies are not included in the below results for the sake of report readability.

4.2 Output

The findings obtained as a result of the Slither scan were reviewed, and many were not included in the report because they were determined as false positives.










5. 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.

5.1 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 (mem_e)METRIC VALUENUMERICAL 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 EE is calculated using the following formula:

E=∏meE = \prod m_e

5.2 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 (mIm_I)METRIC VALUENUMERICAL 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 II is calculated using the following formula:

I=max(mI)+∑mI−max(mI)4I = max(m_I) + \frac{\sum{m_I} - max(m_I)}{4}

5.3 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 (CC)COEFFICIENT VALUENUMERICAL VALUE
Reversibility (rr)None (R:N)
Partial (R:P)
Full (R:F)		1
0.5
0.25
Scope (ss)Changed (S:C)
Unchanged (S:U)		1.25
1
Severity Coefficient CC is obtained by the following product:

C=rsC = rs

The Vulnerability Severity Score SS is obtained by:

S=min(10,EIC∗10)S = min(10, EIC * 10)

The score is rounded up to 1 decimal places.
SeverityScore Value Range
Critical9 - 10
High7 - 8.9
Medium4.5 - 6.9
Low2 - 4.4
Informational0 - 1.9

6. SCOPE

REPOSITORIES
(a) Repository: srusd
(b) Assessed Commit ID: f7a167c
(c) Items in scope:
  • src/Migration.sol
  • src/Savingcoin.sol
Out-of-Scope: Third party dependencies and economic attacks.
(a) Repository: rebalance
(b) Assessed Commit ID: 30f89d4
(c) Items in scope:
  • src/Rebalance.sol
Out-of-Scope: Third party dependencies and economic attacks.
(a) Repository: dam
(b) Assessed Commit ID: 803996d
(c) Items in scope:
  • src/Dam.sol
Out-of-Scope: Third party dependencies and economic attacks.
Remediation Commit ID:
Out-of-Scope: New features/implementations after the remediation commit IDs.

7. Assessment Summary & Findings Overview

Critical

0

High

0

Medium

1

Low

1

Informational

10

Security analysisRisk levelRemediation Date
Inconsistent decimal scaling in rebalance comparisonMediumSolved - 03/31/2025
Permissionless rebalance function accepts untrusted adaptersLowSolved - 04/04/2025
Unsafe ERC20 token transfer methodsInformationalAcknowledged - 04/07/2025
Missing eventsInformationalAcknowledged - 04/07/2025
Missing input validationInformationalAcknowledged - 04/07/2025
Floating pragmaInformationalAcknowledged - 04/07/2025
Unchanged state variables can be marked as immutableInformationalAcknowledged - 04/07/2025
Use of magic numbersInformationalAcknowledged - 04/07/2025
TypoInformationalAcknowledged - 04/07/2025
Use of revert strings instead of custom errorsInformationalAcknowledged - 04/07/2025
APY function returns compound factor instead of percentage yieldInformationalAcknowledged - 04/07/2025
Missing pausing/unpausing mechanismInformationalAcknowledged - 04/07/2025

8. Findings & Tech Details

8.1 Inconsistent decimal scaling in rebalance comparison

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Medium

Description
BVSS
Recommendation
Remediation Comment
Remediation Hash
https://github.com/reservoir-protocol/rebalance/commit/1a084cb1b41deaf70b1ad59fcda1f05ba92687ad
References
reservoir-protocol/rebalance/src/Rebalance.sol#L83-L85

8.2 Permissionless rebalance function accepts untrusted adapters

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Low

Description
BVSS
Recommendation
Remediation Comment
Remediation Hash
https://github.com/reservoir-protocol/rebalance/commit/9cc18deab510b3e00a33b2cfba7ea9a0d2c97502
References
reservoir-protocol/rebalance/src/Rebalance.sol#L52-L64

8.3 Unsafe ERC20 token transfer methods

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Informational

Description
BVSS
Recommendation
Remediation Comment
References
reservoir-protocol/srusd/src/Migration.sol#L68-L71
reservoir-protocol/srusd/src/Savingcoin.sol#L206

8.4 Missing events

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Informational

Description
BVSS
Recommendation
Remediation Comment
References
reservoir-protocol/rebalance/src/Rebalance.sol#L52-L64
reservoir-protocol/rebalance/src/Rebalance.sol#L103-L105

8.5 Missing input validation

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Informational

Description
BVSS
Recommendation
Remediation Comment
References
reservoir-protocol/rebalance/src/Rebalance.sol#L44-L48
reservoir-protocol/rebalance/src/Rebalance.sol#L103-L105
reservoir-protocol/srusd/src/Savingcoin.sol#L186

8.6 Floating pragma

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Informational

Description
BVSS
Recommendation
Remediation Comment
References
reservoir-protocol/dam/src/Dam.sol#L3
reservoir-protocol/srusd/src/Savingcoin.sol#L3
reservoir-protocol/srusd/src/Migration.sol#L3
reservoir-protocol/rebalance/src/Rebalance.sol#L3

8.7 Unchanged state variables can be marked as immutable

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Informational

Description
BVSS
Recommendation
Remediation Comment
References
reservoir-protocol/rebalance/src/Rebalance.sol#L42
reservoir-protocol/srusd/src/Migration.sol#L26-L30

8.8 Use of magic numbers

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Informational

Description
BVSS
Recommendation
Remediation Comment
References
reservoir-protocol/rebalance/src/Rebalance.sol#L85
reservoir-protocol/srusd/src/Migration.sol#L98

8.9 Typo

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Informational

Description
BVSS
Recommendation
Remediation Comment
References
reservoir-protocol/srusd/src/Savingcoin.sol#L202

8.10 Use of revert strings instead of custom errors

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Informational

Description
BVSS
Recommendation
Remediation Comment
References
reservoir-protocol/srusd/src/Migration.sol#L68-L71
reservoir-protocol/srusd/src/Migration.sol#L79
reservoir-protocol/srusd/src/Savingcoin.sol#L144-L147
reservoir-protocol/srusd/src/Savingcoin.sol#L187

8.11 APY function returns compound factor instead of percentage yield

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Informational

Description
BVSS
Recommendation
Remediation Comment
References
reservoir-protocol/srusd/src/Savingcoin.sol#L91-L111

8.12 Missing pausing/unpausing mechanism

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Informational

Description
BVSS
Recommendation
Remediation Comment
References
reservoir-protocol/srusd/src/Savingcoin.sol#L25

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.

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Reservoir Protocol - wsrUSD + Rebalance

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