Magic Block - Delegation Program - Magic Block

Prepared by:

HALBORN

Last Updated 04/25/2025

Date of Engagement: February 24th, 2025 - March 11th, 2025

Summary

100% of all REPORTED Findings have been addressed

All findings

Critical

High

Medium

Low

Informational

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 Single hard-coded admin key
7.2 Unimplemented logic in "verify"
7.3 Unrestricted creation of protocol fees vault
7.4 Hard-coded protocol_fees_percentage
7.5 Insufficient validation in commit_state

8. Automated Testing

1. Introduction

Magic Block engaged Halborn to conduct a security assessment on their Delegation Solana program beginning on March 10th, 2025, and ending on March 28th, 2025. The security assessment was scoped to the Solana program provided in magicblock-labs/delegation-program GitHub repository. Commit hashes and further details can be found in the Scope section of this report.

This Delegation Program lets Solana smart contracts hand off their PDAs to an off-chain “ephemeral rollup” for fast updates. While delegated, the program enforces ownership locks and tracks changes, then finalizes them on-chain so the mainnet state stays consistent.

It supports creating ephemeral balances (temporary escrow accounts), delegating/undelegating program accounts, committing off-chain data, and finalizing rollup results. Fees are handled through two vaults—one for protocol fees and one for each validator’s fees—both governed by an admin or the program upgrade authority.

This design gives high-throughput advantages without compromising on Solana’s security model, enabling dApps to scale off-chain while retaining the trust guarantees and atomic settlement of L1.

2. Assessment Summary

Halborn was provided 15 days for the engagement and assigned one full-time security engineer to review the security of the Solana Program in scope. The engineer is a blockchain and smart contract security expert with advanced smart contract hacking skills, and deep knowledge of multiple blockchain protocols.

The purpose of the assessment is to:

Identify potential security issues within the Delegation Solana Program.
Ensure that the program's functionality operates as intended.

In summary, Halborn identified some improvements to reduce the likelihood and impact of risks, which were addressed or acknowledged by the Magic Block team:

Consider using a multi-signature wallet or multi-step upgradeable authority approach for enhanced resilience. Additionally, store the admin key in a config account that can be updated, rather than hard-coding a Pubkey as a protocol constant.
Implement robust verification logic in verify.rs (e.g., cryptographic proof checks, signature validations, or protocol invariants). Additionally, remove the TODO placeholder once real checks are in place. Ensure the function fails if the new state data is malformed or violates any business-critical constraints.
Add an authorization check so only a recognized admin or multi-signature wallet can create the protocol fees vault.

3. Test Approach and Methodology

Halborn performed a combination of a manual review of the source code and automated security testing to balance efficiency, timeliness, practicality, and accuracy in regard to the scope of the program assessment. While manual testing is recommended to uncover flaws in business logic, processes, and implementation; automated testing techniques help enhance coverage of programs 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, purpose, and use of the platform.
Manual program source code review to identify business logic issues.
Mapping out possible attack vectors.
Thorough assessment of safety and usage of critical Rust variables and functions in scope that could lead to arithmetic vulnerabilities.
Scanning dependencies for known vulnerabilities (cargo audit).
Local runtime testing (solana-test-framework).

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 ( $m_e$ )	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

E

is calculated using the following formula:

$E = \prod m_e$

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 ( $m_I$ )	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

I

is calculated using the following formula:

$I = max(m_I) + \frac{\sum{m_I} - max(m_I)}{4}$

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 ( $C$ )	COEFFICIENT VALUE	NUMERICAL VALUE
Reversibility ( $r$ )	None (R:N) Partial (R:P) Full (R:F)	1 0.5 0.25
Scope ( $s$ )	Changed (S:C) Unchanged (S:U)	1.25 1

Severity Coefficient

C

is obtained by the following product:

$C = rs$

The Vulnerability Severity Score

S

is obtained by:

$S = min(10, EIC * 10)$

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

REPOSITORY

(a) Repository: delegation-program

(b) Assessed Commit ID: 7fc0ae9

src/instruction_builder/finalize.rs
src/instruction_builder/init_validator_fees_vault.rs
src/instruction_builder/commit_state.rs

↓ Expand ↓

Out-of-Scope: Third-party dependencies and economic attacks.

Remediation Commit ID:

Out-of-Scope: New features/implementations after the remediation commit IDs.

6. Assessment Summary & Findings Overview

Critical

High

Medium

Low

Informational

Security analysis	Risk level	Remediation Date
Single Hard-Coded Admin Key	Low	Solved - 04/02/2025
Unimplemented logic in "verify"	Low	Solved - 04/02/2025
Unrestricted Creation of Protocol Fees Vault	Informational	Acknowledged - 04/02/2025
Hard-Coded PROTOCOL_FEES_PERCENTAGE	Informational	Acknowledged - 04/02/2025
Insufficient Validation in commit_state	Informational	Solved - 04/02/2025

7. Findings & Tech Details

7.1 Single Hard-Coded Admin Key

Low

Description

BVSS

AO:A/AC:L/AX:L/R:N/S:U/C:N/A:N/I:L/D:N/Y:N (2.5)

Recommendation

Remediation Comment

Remediation Hash

https://github.com/magicblock-labs/delegation-program/pull/72/commits/ed1b60da882f8e52fc786c8ada4b272bde8b05f8

7.2 Unimplemented logic in "verify"

Low

Description

BVSS

AO:A/AC:L/AX:L/R:N/S:U/C:N/A:N/I:L/D:N/Y:N (2.5)

Recommendation

Remediation Comment

Remediation Hash

https://github.com/magicblock-labs/delegation-program/pull/72/commits/a7e549d1e76f363f51f9bf9422114cf07d93ced7

7.3 Unrestricted Creation of Protocol Fees Vault

Informational

Description

BVSS

AO:A/AC:L/AX:L/R:N/S:U/C:N/A:N/I:N/D:N/Y:N (0.0)

Recommendation

Remediation Comment

7.4 Hard-Coded PROTOCOL_FEES_PERCENTAGE

Informational

Description

BVSS

AO:A/AC:L/AX:L/R:N/S:U/C:N/A:N/I:N/D:N/Y:N (0.0)

Recommendation

Remediation Comment

7.5 Insufficient Validation in commit_state

Informational

Description

BVSS

AO:A/AC:L/AX:L/R:N/S:U/C:N/A:N/I:N/D:N/Y:N (0.0)

Recommendation

Remediation Comment

Remediation Hash

https://github.com/magicblock-labs/delegation-program/pull/72/commits/a7e549d1e76f363f51f9bf9422114cf07d93ced7

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.

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 Single hard-coded admin key
7.2 Unimplemented logic in "verify"
7.3 Unrestricted creation of protocol fees vault
7.4 Hard-coded protocol_fees_percentage
7.5 Insufficient validation in commit_state