Bera LRT Contracts - Lair Finance

1. Introduction

Lair Finance engaged Halborn to conduct a security assessment of their smart contracts from June 10th to June 19th, 2025, with a follow-up review from July 19th to July 23rd, 2025. The scope of this assessment was limited to the smart contracts provided to the Halborn team. Commit hashes and additional details are documented in the Scope section of this report.

2. Assessment Summary

The Halborn team dedicated a total of twelve days to this engagement, deploying one full-time security engineer to evaluate the smart contracts’ security posture.

The assigned security engineer is an expert in blockchain and smart contract security, with advanced skills in penetration testing, smart contract exploitation, and a comprehensive understanding of multiple blockchain protocols.

The objectives of this assessment were to:

• Verify that the smart contract functions operate as intended.

• Identify potential security vulnerabilities within the smart contracts.

In summary, Halborn identified several areas for improvement to reduce both the likelihood and impact of potential risks. The Lair Finance team has partially addressed some of these recommendations. The primary suggestions include:

• Restrict receivedToken() to internal calls to prevent unauthorized token transfers by approved users.

• Use correct decimals for price calculations in reward swaps.

• Verify proper Kodiak interface usage.

• Correct arithmetic underflow in the getTokenAmountByToken1 function to prevent staking denial-of-service (DoS) via token1.

• Fix incorrect refund logic in _stake to prevent staking reverts caused by ERC20InsufficientBalance errors.

• Address unit mismatch between BGT and WBERA tokens during token0 swap to prevent DoS in token0 staking.

• Mitigate front-running attacks on reward harvesting by integrating reward execution within stake and unstake flows.

• Implement a safe token approval mechanism compatible with tokens like USDT to prevent reverts.

• Incorporate slippage protection in reward token swaps to defend against MEV extraction.

• Follow established smart contract best practices.

3. Test Approach and Methodology

Halborn employed a combination of manual, semi-automated, and automated security testing methods to ensure effectiveness, efficiency, and accuracy within the scope of this assessment. Manual testing was vital for uncovering issues related to logic, processes, and implementation details, while automated techniques enhanced code coverage and helped identify deviations from security best practices. The assessment involved the following phases and tools:

• Research into the architecture and purpose of the smart contracts.

• Manual review and walkthrough of the smart contract code.

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

• Manual testing using custom scripts.

• Static security analysis of the scoped contracts and imported functions utilizing Slither.

• Local deployment and testing with Foundry.