Stratium HYPE Staking Vault - HorizonX

1. Introduction

HorizonX engaged Halborn to conduct a security assessment on their smart contracts beginning on December 8th, 2025 and ending on December 24th, 2025. The security assessment was scoped to the smart contracts provided in the strong-smart-contracts-internal Github repository, provided to the Halborn team. Commit hash and further details can be found in the Scope section of this report.

The Stratium Hyperliquid Vault is a liquid staking protocol where users deposit HYPE tokens to receive srHYPE, the vault delegates to validators via HyperCore precompiles, manages withdrawal queues with unbonding periods, and distributes collateral rewards.

Following the completion of the initial audit, two additional issues were identified during a re-scan of commit 4870a97 and subsequently remediated in commit 1604c64:

• Accounting drift in totalUnstakingForWithdrawals during slashing events - The applySlash() function failed to update the totalUnstakingForWithdrawals tracking variable when reducing withdrawal amounts, causing incorrect liquidity calculations.

• Batch processor DoS via non-existent HyperCore account - The processWithdrawalQueue() function would revert when encountering users without HyperCore accounts, permanently blocking the batch withdrawal processor.

Both issues have been successfully resolved in the remediation commit with appropriate accounting updates and graceful error handling.

2. Assessment Summary

Halborn was provided with 8 days for this engagement and assigned a full-time security engineer to assess the security of the smart contracts in scope. The assigned engineer possess deep expertise in blockchain and smart contract security, including hands-on experience with multiple blockchain protocols.

The objective of this assessment is to:

• Identify potential security issues within the Stratium protocol smart contracts.

• Ensure that smart contract of Stratium protocol functions operate as intended.

In summary, Halborn identified several areas for improvement to reduce the likelihood and impact of security risks, which were successfully addressed by the HorizonX team. The main recommendations were:

• Decouple reward balance snapshotting from reward distribution by fixing eligible balances in a prior block, thereby preventing same-block manipulation.

• Extend the slashing mechanism to support multiple events by allowing repeated slashing with appropriate safeguards and event logging.

• Add a pre-transfer balance check to ensure the Core spot balance for the specified collateral is sufficient to cover the reward amount, reverting otherwise.

• Include logic to refresh Core balances from L1Read before processing withdrawals.

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 the smart contract 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 the architecture and purpose of the Stratium protocol.

• Manual code review and walkthrough of the Stratium in-scope contracts.

• Manual assessment of critical Solidity variables and functions to identify potential vulnerability classes.

• Manual testing using custom scripts.

• Static Analysis of security for scoped contracts and imported functions (Slither).

• Local deployment and testing with Foundry