Staking & Rewards Contracts - Kite

1. INTRODUCTION

Kite engaged Halborn to perform a security assessment of their smart contracts starting on January 13th 2025 and ending on January 19th, 2026. The assessment scope was limited to the smart contracts provided to Halborn. Commit hashes and additional details are available in the Scope section of this report.

The Kite protocol implements a sophisticated cross-chain Proof-of-Stake (PoS) validator management system designed for Avalanche's Interchain Messaging (ICM) framework. It orchestrates validator/delegator lifecycle management, reward distribution, and uptime verification through Warp Messaging between the P-Chain and C-Chain.

2. ASSESSMENT SUMMARY

Halborn was allocated 4 day for this engagement and assigned 1 full-time security engineers to conduct a comprehensive review of the smart contracts within scope. The engineers are experts in blockchain and smart contract security, with advanced skills in penetration testing and smart contract exploitation, as well as extensive knowledge of multiple blockchain protocols.

The objectives of this assessment are to:

• Identify potential security vulnerabilities within the smart contracts.

• Verify that the smart contract functionality operates as intended.

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

• Add the nonReentrant modifier to prevent reentrancy.

• Contract should initialize lastClaimUptimeSeconds to the validator's current during initialization.

• Implement a period-based uptime evaluation system that assesses each reward claim window independently.

• Make uptime proof submission mandatory to accept new delegators.

3. TEST APPROACH AND METHODOLODY

Halborn conducted a combination of manual code review and automated security testing to balance efficiency, timeliness, practicality, and accuracy within the scope of this assessment. While manual testing is crucial for identifying flaws in logic, processes, and implementation, automated testing enhances coverage of smart contracts and quickly detects deviations from established security best practices.

The following phases and associated tools were employed throughout the term of the assessment:

• Research into the platform's architecture, purpose and use.

• Manual code review and walkthrough of smart contracts to identify any logical issues.

• Comprehensive assessment of the safety and usage of critical Solidity variables and functions within scope that could lead to arithmetic-related vulnerabilities.

• Local testing using custom scripts (Foundry).

• Fork testing against main networks (Foundry).

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