Smart Contract Assessment Audit | Prism Market

Summary

100% of all REPORTED Findings have been addressed

About this report

Assessment Type

Assurance Assessment

Date of Engagement

September 18th, 2026 - September 18th, 2026

Source Code

prism

Assessed Commit ID

80168fa

Severity Breakdown

0Acknowledged
0Risk Accepted
13Solved
13All Findings

Critical1
- 1Solved
High1
- 1Solved
Medium2
- 2Solved
Low4
- 4Solved
Informational5
- 5Solved

INTRODUCTION#

Prism Market engaged Halborn to perform a security assessment of their smart contracts starting and ending on September 18th, 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 codebase in scope consists of smart contracts implementing a Hedera based prediction market where a signed intent off-chain CLOB matches equal and opposing orders and settles them on-chain via atomic collateral flows between YES/NO position tokens across primary and secondary legs.

ASSESSMENT SUMMARY#

Halborn was allocated 1 day for this engagement and assigned 1 full-time security engineer to conduct a comprehensive review of the smart contracts within scope. The engineer is an expert 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 were 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 addressed by the Prism Market team. The main recommendations were:

Represent price in the contract. Replace the equal-collateral requirement with a complete-set model.
Track cumulative fills per authorization and enforce the signed ceiling across all settlements. Add explicit replay protection, so that a fully consumed txId can never be submitted again.
Add a signer-callable function to cancel a signed trade authorization on-chain, and reject settlements of cancelled or fully filled authorizations.

The Prism Market team addressed all findings in a new PrismV2.sol implementation behind an atomically initialized UUPS proxy. The remediation review verified the fixes for the reported findings only.

TEST APPROACH AND METHODOLOGY#

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).

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)	1
Attack Origin (AO)	Specific (AO:S)	0.2
Attack Cost (AC)	Low (AC:L)	1
	Medium (AC:M)	0.67
	High (AC:H)	0.33
Attack Complexity (AX)	Low (AX:L)	1
	Medium (AX:M)	0.67
	High (AX:H)	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)	0
	Low (C:L)	0.25
	Medium (C:M)	0.5
	High (C:H)	0.75
	Critical (C:C)	1
Integrity (I)	None (I:N)	0
	Low (I:L)	0.25
	Medium (I:M)	0.5
	High (I:H)	0.75
	Critical (I:C)	1
Availability (A)	None (A:N)	0
	Low (A:L)	0.25
	Medium (A:M)	0.5
	High (A:H)	0.75
	Critical (A:C)	1
Deposit (D)	None (D:N)	0
	Low (D:L)	0.25
	Medium (D:M)	0.5
	High (D:H)	0.75
	Critical (D:C)	1
Yield (Y)	None (Y:N)	0
	Low (Y:L)	0.25
	Medium (Y:M)	0.5
	High (Y:H)	0.75
	Critical (Y:C)	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)	1
	Partial (R:P)	0.5
	Full (R:F)	0.25
Scope ( $s$ )	Changed (S:C)	1.25
Scope ( $s$ )	Unchanged (S:U)	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.

Critical	High	Medium	Low	Informational
9 - 10	7 - 8.9	4.5 - 6.9	2 - 4.4	0 - 1.9

Scope#

(a) Repository:prism

(b) Assessed Commit ID:80168fa60e41a01bb776e673038e438101472cbc

1 files

scs / contracts

1 file

Prism.sol

solidity

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

21821186ac985783efea5061f5961e46cd2de68f

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

Assessment Summary & Findings Overview#

#	Title	Severity	Score	Status
HAL-01	Position tokens are minted 1:1 with collateral on both legs, so every market pays a fixed 2:1 to the winning side regardless of the price traders signed	Critical	10.0	Solved10/16/2026
HAL-02	Signed trade authorizations are never marked as consumed, allowing settlement beyond the user's signed collateral limit	High	7.5	Solved10/16/2026
HAL-03	Users cannot cancel signed trade authorizations on-chain	Medium	5.0	Solved10/16/2026
HAL-04	Trading remains open until oracle resolution, allowing informed traders to fill stale orders after the outcome is known	Medium	5.0	Solved10/16/2026
HAL-05	Signed trade payload is not bound to the chain, contract, or a validity window	Low	2.5	Solved10/16/2026
HAL-06	Rake is deducted from refunds after an emergency market closure	Low	2.5	Solved10/16/2026
HAL-07	Constructor initialized state does not exist behind a proxy, leaving every privileged path unreachable	Low	2.5	Solved10/16/2026
HAL-08	Rake is read at redemption time, so a rake change after resolution re-prices the unredeemed claims of already resolved markets	Low	2.5	Solved10/16/2026
HAL-09	Buy legs in posColToksOnBehalfAtomic() transfer collateral before updating state	Informational	1.7	Solved10/16/2026
HAL-10	redeemOnBehalfOfUser() redeems for any user without the signature its documentation describes	Informational	1.7	Solved10/16/2026
HAL-11	owner cannot be rotated, making any owner side operational failure permanent	Informational	1.7	Solved10/16/2026
HAL-12	outcomes public getter returns 0 for both unresolved and NO resolved markets	Informational	1.7	Solved10/16/2026
HAL-13	Constructor does not validate _collateralToken	Informational	1.7	Solved10/16/2026

Findings & Tech Details#

HAL-01Solved

Position tokens are minted 1:1 with collateral on both legs, so every market pays a fixed 2:1 to the winning side regardless of the price traders signed

Critical

10.0AO:A/AC:L/AX:L/R:N/S:U/C:N/A:N/I:C/D:C/Y:NAO:A/AC:L/AX:L/R:N/S:U/C:N/A:N/I:C/D:C/Y:N

Description

Proof of Concept

Recommendation

Remediation Comment

Addressed in:

Addressed in:

21821186ac985783efea5061f5961e46cd2de68f

Disclaimer#

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.