Prepared by:
HALBORN
Last Updated Unknown date
Date of Engagement: October 7th, 2024 - November 8th, 2024
Summary
100% of all REPORTED Findings have been addressed
All findings
28
Critical
3
High
3
Medium
6
Low
5
Informational
11
Table of Contents
- 1. Introduction
- 2. Assessment summary
- 3. Test approach and methodology
- 4. Risk methodology
- 5. Scope
- 6. Assessment summary & findings overview
- 7. Findings & Tech Details
- 7.1 Quadratic voting strategy incompatible with quorum calculation in lucidgovernor
- 7.2 Lack of access control in receivemessage in assetcontroller contract
- 7.3 Division by zero in quadratic vote weight calculation
- 7.4 Bypass of bridge limits in burnandbridgemulti function
- 7.5 Mathematical incompatibility between flexvotingclient and quadraticvotestrategy
- 7.6 Lp token price manipulation through reserve
- 7.7 Front-running vulnerability in two-step deployment and configuration process
- 7.8 Unhandled exceptions in ccip message processing can lead to cross-chain communication failure
- 7.9 Uniswapv3 oracle vulnerability on l2 networks due to sequencer downtime
- 7.10 Excess fees retention in assetcontroller
- 7.11 Missing sequencer uptime check in bondchainlinkoracle for l2 deployments
- 7.12 Uninitialized eip712 functionality in votingcontrollerupgradeable __eip712_init
- 7.13 Incorrect gas refund calculation due to eip-150 rule in voting functions
- 7.14 Improper initialization of timelock delay in receivemessage function
- 7.15 Unsafe eip712 message hashing in cross-chain voting mechanism
- 7.16 Create3 factory is not compatible with zksync era
- 7.17 Failed eth transfers not handled in refundgas function
- 7.18 Useless token execution functions present in axelarexecutable contract
- 7.19 Unlocked pragma compiler
- 7.20 Useless interface import in wormholeadapter contract
- 7.21 Suboptimal memory usage in bondchainlinkoracle._gettwofeedprice function
- 7.22 Missing zero amount check in cross-chain bridge functions
- 7.23 Inconsistent amount handling after fee deduction in multi-bridge transfer
- 7.24 Inefficient storage access pattern in message reception handling
- 7.25 Missing duration validation enables zero division in base asset bridge
- 7.26 Insufficient delegation control in connext cross-chain transfers
- 7.27 Gas inefficient role check implementation
- 7.28 Owner can renounce ownership
- 8. Automated Testing
1. Introduction
Lucid Labs engaged Halborn to conduct a security assessment on their smart contracts revisions beginning on October 7th, 2024 and ending on November 8th, 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.
2. Assessment Summary
The team at Halborn was provided 5 weeks for the engagement and assigned a full-time 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 partially addressed by the Lucid Labs team. The main ones were the following:
Implement a working mechanism about quadratic implementation and governor strategy.Add access controls for asset controller.Remove the division by zero probability.Implement a check in burnAndBridgeMulti to ensure all provided adapter addresses are unique.Create another FlexVotingClient to apply quadratic transformation to individual votes before aggregation.Implement Alpha Finance's formula for pricing LP tokens.
3. 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)
4. 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 () | METRIC VALUE | NUMERICAL 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 is calculated using the following formula:
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 () | METRIC VALUE | NUMERICAL 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 is calculated using the following formula:
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 () | COEFFICIENT VALUE | NUMERICAL VALUE |
|---|---|---|
| Reversibility () | None (R:N) Partial (R:P) Full (R:F) | 1 0.5 0.25 |
| Scope () | Changed (S:C) Unchanged (S:U) | 1.25 1 |
Severity Coefficient is obtained by the following product:
The Vulnerability Severity Score is obtained by:
The score is rounded up to 1 decimal places.
| Severity | Score Value Range |
|---|---|
| Critical | 9 - 10 |
| High | 7 - 8.9 |
| Medium | 4.5 - 6.9 |
| Low | 2 - 4.4 |
| Informational | 0 - 1.9 |
5. SCOPE
REPOSITORIES
(a) Repository: demos-contracts-v1
(b) Assessed Commit ID: 74b6f30
(c) Items in scope:
- create3/libs/Bytes32AddressLib.sol
- create3/Create3Factory.sol
- create3/libs/CREATE3.sol
↓ Expand ↓
Out-of-Scope: Third party dependencies and economic attacks.
(a) Repository: lucid-contracts
(b) Assessed Commit ID: ae25f87
(c) Items in scope:
- contracts/tokens/ERC20/interfaces/IXERC20.sol
- contracts/tokens/ERC20/interfaces/IXERC20Lockbox.sol
- contracts/tokens/ERC20/XERC20Lockbox.sol
↓ Expand ↓
Out-of-Scope: Third Party dependencies., Economic Attacks.
Out-of-Scope: New features/implementations after the remediation commit IDs.
6. Assessment Summary & Findings Overview
Critical
3
High
3
Medium
6
Low
5
Informational
11
| Security analysis | Risk level | Remediation Date |
|---|---|---|
| Quadratic Voting Strategy Incompatible with Quorum Calculation in LucidGovernor | Critical | Solved - 12/02/2024 |
| Lack of Access Control in receiveMessage in AssetController Contract | Critical | Solved - 10/22/2024 |
| Division by Zero in Quadratic Vote Weight Calculation | Critical | Solved - 11/28/2024 |
| Bypass of Bridge Limits in burnAndBridgeMulti Function | High | Solved - 10/22/2024 |
| Mathematical Incompatibility Between FlexVotingClient and QuadraticVoteStrategy | High | Solved - 12/04/2024 |
| LP Token Price Manipulation Through Reserve | High | Solved - 12/05/2024 |
| Front-Running Vulnerability in Two-Step Deployment and Configuration Process | Medium | Solved - 11/04/2024 |
| Unhandled Exceptions in CCIP Message Processing Can Lead to Cross-Chain Communication Failure | Medium | Risk Accepted - 11/09/2024 |
| UniswapV3 Oracle Vulnerability on L2 Networks Due to Sequencer Downtime | Medium | Solved - 10/28/2024 |
| Excess Fees Retention in AssetController | Medium | Solved - 10/22/2024 |
| Missing Sequencer Uptime Check in BondChainlinkOracle for L2 Deployments | Medium | Solved - 10/23/2024 |
| Uninitialized EIP712 Functionality in VotingControllerUpgradeable __EIP712_init | Medium | Solved - 10/29/2024 |
| Incorrect Gas Refund Calculation Due To EIP-150 Rule In Voting Functions | Low | Solved - 12/04/2024 |
| Improper Initialization of Timelock Delay in receiveMessage Function | Low | Solved - 11/20/2024 |
| Unsafe EIP712 Message Hashing in Cross-Chain Voting Mechanism | Low | Solved - 11/20/2024 |
| CREATE3 Factory Is Not Compatible With ZKSYNC Era | Low | Risk Accepted - 11/23/2024 |
| Failed ETH Transfers Not Handled in RefundGas Function | Low | Solved - 10/29/2024 |
| Useless Token Execution Functions Present in AxelarExecutable Contract | Informational | Solved - 11/19/2024 |
| Unlocked Pragma Compiler | Informational | Solved - 11/21/2024 |
| Useless Interface Import in WormholeAdapter Contract | Informational | Solved - 11/19/2024 |
| Suboptimal Memory Usage in BondChainlinkOracle._getTwoFeedPrice Function | Informational | Solved - 12/04/2024 |
| Missing Zero Amount Check in Cross-Chain Bridge Functions | Informational | Solved - 11/19/2024 |
| Inconsistent Amount Handling After Fee Deduction in Multi-Bridge Transfer | Informational | Solved - 11/20/2024 |
| Inefficient Storage Access Pattern in Message Reception Handling | Informational | Solved - 11/20/2024 |
| Missing Duration Validation Enables Zero Division in Base Asset Bridge | Informational | Solved - 11/20/2024 |
| Insufficient Delegation Control in Connext Cross-Chain Transfers | Informational | Solved - 11/21/2024 |
| Gas Inefficient Role Check Implementation | Informational | Solved - 11/20/2024 |
| Owner Can Renounce Ownership | Informational | Acknowledged - 11/19/2024 |
7. Findings & Tech Details
7.1 Quadratic Voting Strategy Incompatible with Quorum Calculation in LucidGovernor
//Critical
Description
Proof of Concept
BVSS
Recommendation
Remediation Comment
References
7.2 Lack of Access Control in receiveMessage in AssetController Contract
//Critical
Description
Proof of Concept
BVSS
Recommendation
Remediation Comment
References
7.3 Division by Zero in Quadratic Vote Weight Calculation
//Critical
Description
Proof of Concept
BVSS
Recommendation
Remediation Comment
References
7.4 Bypass of Bridge Limits in burnAndBridgeMulti Function
//High
Description
Proof of Concept
BVSS
Recommendation
Remediation Comment
References
7.5 Mathematical Incompatibility Between FlexVotingClient and QuadraticVoteStrategy
//High
Description
Proof of Concept
BVSS
Recommendation
Remediation Comment
References
7.6 LP Token Price Manipulation Through Reserve
//High
Description
Proof of Concept
BVSS
Recommendation
Remediation Comment
References
7.7 Front-Running Vulnerability in Two-Step Deployment and Configuration Process
//Medium
Description
BVSS
Recommendation
Remediation Comment
References
7.8 Unhandled Exceptions in CCIP Message Processing Can Lead to Cross-Chain Communication Failure
//Medium
Description
BVSS
Recommendation
Remediation Comment
References
7.9 UniswapV3 Oracle Vulnerability on L2 Networks Due to Sequencer Downtime
//Medium
Description
BVSS
Recommendation
Remediation Comment
References
7.10 Excess Fees Retention in AssetController
//Medium
Description
BVSS
Recommendation
Remediation Comment
References
7.11 Missing Sequencer Uptime Check in BondChainlinkOracle for L2 Deployments
//Medium
Description
BVSS
Recommendation
Remediation Comment
References
7.12 Uninitialized EIP712 Functionality in VotingControllerUpgradeable __EIP712_init
//Medium
Description
BVSS
Recommendation
Remediation Comment
References
7.13 Incorrect Gas Refund Calculation Due To EIP-150 Rule In Voting Functions
//Low
Description
BVSS
Recommendation
Remediation Comment
References
7.14 Improper Initialization of Timelock Delay in receiveMessage Function
//Low
Description
BVSS
Recommendation
Remediation Comment
References
7.15 Unsafe EIP712 Message Hashing in Cross-Chain Voting Mechanism
//Low
Description
BVSS
Recommendation
Remediation Comment
References
7.16 CREATE3 Factory Is Not Compatible With ZKSYNC Era
//Low
Description
BVSS
Recommendation
Remediation Comment
References
7.17 Failed ETH Transfers Not Handled in RefundGas Function
//Low
Description
BVSS
Recommendation
Remediation Comment
References
7.18 Useless Token Execution Functions Present in AxelarExecutable Contract
//Informational
Description
BVSS
Recommendation
Remediation Comment
References
7.19 Unlocked Pragma Compiler
//Informational
Description
BVSS
Recommendation
Remediation Comment
7.20 Useless Interface Import in WormholeAdapter Contract
//Informational
Description
BVSS
Recommendation
Remediation Comment
References
7.21 Suboptimal Memory Usage in BondChainlinkOracle._getTwoFeedPrice Function
//Informational
Description
BVSS
Recommendation
Remediation Comment
References
7.22 Missing Zero Amount Check in Cross-Chain Bridge Functions
//Informational
Description
BVSS
Recommendation
Remediation Comment
References
7.23 Inconsistent Amount Handling After Fee Deduction in Multi-Bridge Transfer
//Informational
Description
BVSS
Recommendation
Remediation Comment
References
7.24 Inefficient Storage Access Pattern in Message Reception Handling
//Informational
Description
BVSS
Recommendation
Remediation Comment
References
7.25 Missing Duration Validation Enables Zero Division in Base Asset Bridge
//Informational
Description
BVSS
Recommendation
Remediation Comment
References
7.26 Insufficient Delegation Control in Connext Cross-Chain Transfers
//Informational
Description
BVSS
Recommendation
Remediation Comment
References
7.27 Gas Inefficient Role Check Implementation
//Informational
Description
BVSS
Recommendation
Remediation Comment
References
7.28 Owner Can Renounce Ownership
//Informational
Description
BVSS
Recommendation
Remediation Comment
References
8. Automated Testing
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.
Table of Contents
- 1. Introduction
- 2. Assessment summary
- 3. Test approach and methodology
- 4. Risk methodology
- 5. Scope
- 6. Assessment summary & findings overview
- 7. Findings & Tech Details
- 7.1 Quadratic voting strategy incompatible with quorum calculation in lucidgovernor
- 7.2 Lack of access control in receivemessage in assetcontroller contract
- 7.3 Division by zero in quadratic vote weight calculation
- 7.4 Bypass of bridge limits in burnandbridgemulti function
- 7.5 Mathematical incompatibility between flexvotingclient and quadraticvotestrategy
- 7.6 Lp token price manipulation through reserve
- 7.7 Front-running vulnerability in two-step deployment and configuration process
- 7.8 Unhandled exceptions in ccip message processing can lead to cross-chain communication failure
- 7.9 Uniswapv3 oracle vulnerability on l2 networks due to sequencer downtime
- 7.10 Excess fees retention in assetcontroller
- 7.11 Missing sequencer uptime check in bondchainlinkoracle for l2 deployments
- 7.12 Uninitialized eip712 functionality in votingcontrollerupgradeable __eip712_init
- 7.13 Incorrect gas refund calculation due to eip-150 rule in voting functions
- 7.14 Improper initialization of timelock delay in receivemessage function
- 7.15 Unsafe eip712 message hashing in cross-chain voting mechanism
- 7.16 Create3 factory is not compatible with zksync era
- 7.17 Failed eth transfers not handled in refundgas function
- 7.18 Useless token execution functions present in axelarexecutable contract
- 7.19 Unlocked pragma compiler
- 7.20 Useless interface import in wormholeadapter contract
- 7.21 Suboptimal memory usage in bondchainlinkoracle._gettwofeedprice function
- 7.22 Missing zero amount check in cross-chain bridge functions
- 7.23 Inconsistent amount handling after fee deduction in multi-bridge transfer
- 7.24 Inefficient storage access pattern in message reception handling
- 7.25 Missing duration validation enables zero division in base asset bridge
- 7.26 Insufficient delegation control in connext cross-chain transfers
- 7.27 Gas inefficient role check implementation
- 7.28 Owner can renounce ownership
- 8. Automated Testing
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