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DSToken - Securitize

Prepared by:

Halborn Logo

HALBORN

Last Updated 10/08/2025

Date of Engagement: September 1st, 2025 - September 25th, 2025

Summary

100% of all REPORTED Findings have been addressed

All findings

13

Critical

0

High

0

Medium

2

Low

4

Informational

7

Table of Contents

1. Introduction

Securitize Protocol engaged Halborn to conduct a security assessment on their smart contracts beginning on September 1st, 2025 and ending on September 25th, 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.


Securitize Protocol is a digital securities framework where tokens are fully backed and governed by compliance rules. The TokenIssuer handles issuance and minting, while the ComplianceService enforces transfer restrictions, lockups, and jurisdictional investor limits using data from the RegistryService. Core actions such as transfer, swap, buy, and redemption automatically route through these compliance checks, ensuring every movement of tokens respects regulations. Governance is managed by the TrustService, assigning roles like Master, Issuer, and Transfer Agent to control permissions and upgrades. Together, these components create a regulated on-chain ecosystem for compliant tokenized securities.

2. Assessment Summary

Halborn assigned a full-time security engineer to review the security of the smart contracts in scope. The engineer is a blockchain and smart contract security expert with advanced penetration testing and smart contract hacking skills, and deep knowledge of multiple blockchain protocols.

 

The purpose of the assessment is to:

    • Identify potential security issues within the smart contracts.

    • Ensure that smart contract functionality operates as intended.

 

In summary, Halborn identified several areas for improvement to reduce both the likelihood and impact of potential risks, which were successfully addressed by the Securitize team. The main recommendations were:

    • Correct the totalIssued handling in burn logic to prevent a permanent cap lock state where the protocol becomes stuck and no new participants can mint tokens.

    • Enforce wallet validation in issueTokensCustom to prevent issuance of tokens to unregistered or non-compliant addresses.


3. Test Approach and Methodology

Halborn performed a combination of manual code review and automated security testing to balance efficiency, timeliness, practicality, and accuracy in regard to the scope of this assessment. While manual testing is essential to uncover flaws in logic, process, and implementation, automated testing techniques enhance coverage of smart contracts and can quickly identify issues that do not follow security best practices.

The following phases and associated tools were used throughout the assessment:

    • Research into the architecture, purpose, and use of the platform.

    • Manual code review and walkthrough of the smart contracts to identify potential logic issues.

    • Manual testing of all core functions, including deposit, withdraw, repay, and borrow, to validate expected behavior and identify edge-case vulnerabilities.

    • Local testing to simulate contract interactions and validate functional and security assumptions.

    • Local deployment and testing with 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 (mem_e)METRIC VALUENUMERICAL 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 EE is calculated using the following formula:

E=∏meE = \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 (mIm_I)METRIC VALUENUMERICAL 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 II is calculated using the following formula:

I=max(mI)+∑mI−max(mI)4I = 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 (CC)COEFFICIENT VALUENUMERICAL VALUE
Reversibility (rr)None (R:N)
Partial (R:P)
Full (R:F)		1
0.5
0.25
Scope (ss)Changed (S:C)
Unchanged (S:U)		1.25
1
Severity Coefficient CC is obtained by the following product:

C=rsC = rs

The Vulnerability Severity Score SS is obtained by:

S=min(10,EIC∗10)S = min(10, EIC * 10)

The score is rounded up to 1 decimal places.
SeverityScore Value Range
Critical9 - 10
High7 - 8.9
Medium4.5 - 6.9
Low2 - 4.4
Informational0 - 1.9

5. SCOPE

REPOSITORY
(a) Repository: dstoken
(b) Assessed Commit ID: f288c35
(c) Items in scope:
  • contracts/rebasing/RebasingLibrary.sol
  • contracts/rebasing/SecuritizeRebasingProvider.sol
  • contracts/registry/RegistryService.sol
↓ 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

0

High

0

Medium

2

Low

4

Informational

7

Security analysisRisk levelRemediation Date
Permanent Cap Lock due to totalIssued not reduced on burn leads to protocol stuck and no one can participateMediumSolved - 10/03/2025
Untracked Wallets from No-Compliance Issuance Can Break Investor Records Because checkWalletsForList Isn’t CalledMediumSolved - 10/29/2025
Bulk issuance enforces a single issuanceTime for all recipients, preventing flexible schedulingLowRisk Accepted - 10/06/2025
Incorrect revert reason parsing in MulticallProxy obscures custom errorsLowSolved - 10/29/2025
Ineffective lock time condition in getComplianceTransferableTokens leads to misleading logicLowRisk Accepted - 10/06/2025
Unsafe ERC20 transferFrom and approve usage in executeStableCoinTransferLowSolved - 09/29/2025
Missing Two-Step Ownership Transfer Protection in ServiceConsumerInformationalAcknowledged - 09/19/2025
Unnecessary dynamic array allocation in issueTokensCustom wastes gasInformationalAcknowledged - 10/06/2025
Potential Out-of-Gas Risk in getTokenBalances for Large Input ArraysInformationalAcknowledged - 10/06/2025
Incorrect Maximum Holdings Check Prevents Valid TransfersInformationalSolved - 10/06/2025
Inefficient use of dynamic array for fixed-length parametersInformationalSolved - 09/29/2025
Missing input validation in issueTokensWithNoCompliance function InformationalSolved - 09/29/2025
Incorrect Loop Variable Type in _registerNewInvestorInformationalSolved - 09/29/2025

7. Findings & Tech Details

7.1 Permanent Cap Lock due to totalIssued not reduced on burn leads to protocol stuck and no one can participate

//

Medium

Description
Proof of Concept
BVSS
Recommendation
Remediation Comment
Remediation Hash
https://github.com/securitize-io/dstoken/commit/c2e62c9c1137bb7c6f548b72f960d864c42445fc

7.2 Untracked Wallets from No-Compliance Issuance Can Break Investor Records Because checkWalletsForList Isn’t Called

//

Medium

Description
BVSS
Recommendation
Remediation Comment
Remediation Hash
https://github.com/securitize-io/dstoken/commit/f14ea54928678fb56f3dbaa11b6e27236b306a41

7.3 Bulk issuance enforces a single issuanceTime for all recipients, preventing flexible scheduling

//

Low

Description
BVSS
Recommendation
Remediation Comment

7.4 Incorrect revert reason parsing in MulticallProxy obscures custom errors

//

Low

Description
BVSS
Recommendation
Remediation Comment
Remediation Hash
https://github.com/securitize-io/dstoken/commit/2d539a81da45377bb11415f59c15bdbe4d296da7

7.5 Ineffective lock time condition in getComplianceTransferableTokens leads to misleading logic

//

Low

Description
BVSS
Recommendation
Remediation Comment

7.6 Unsafe ERC20 transferFrom and approve usage in executeStableCoinTransfer

//

Low

Description
BVSS
Recommendation
Remediation Comment
Remediation Hash
https://github.com/securitize-io/dstoken/commit/37e0a7b878ca6fc1a677720a0b8e68f54a596484

7.7 Missing Two-Step Ownership Transfer Protection in ServiceConsumer

//

Informational

Description
BVSS
Recommendation
Remediation Comment

7.8 Unnecessary dynamic array allocation in issueTokensCustom wastes gas

//

Informational

Description
BVSS
Recommendation
Remediation Comment

7.9 Potential Out-of-Gas Risk in getTokenBalances for Large Input Arrays

//

Informational

Description
BVSS
Recommendation
Remediation Comment

7.10 Incorrect Maximum Holdings Check Prevents Valid Transfers

//

Informational

Description
BVSS
Recommendation
Remediation Comment
Remediation Hash
https://github.com/securitize-io/dstoken/commit/fb92b4d389f8a24c670cd5d157894fd29f508c02

7.11 Inefficient use of dynamic array for fixed-length parameters

//

Informational

Description
BVSS
Recommendation
Remediation Comment
Remediation Hash
https://github.com/securitize-io/dstoken/commit/37e0a7b878ca6fc1a677720a0b8e68f54a596484

7.12 Missing input validation in issueTokensWithNoCompliance function

//

Informational

Description
BVSS
Recommendation
Remediation Comment
Remediation Hash
https://github.com/securitize-io/dstoken/commit/f14ea54928678fb56f3dbaa11b6e27236b306a41

7.13 Incorrect Loop Variable Type in _registerNewInvestor

//

Informational

Description
BVSS
Recommendation
Remediation Comment
Remediation Hash
https://github.com/securitize-io/dstoken/commit/37e0a7b878ca6fc1a677720a0b8e68f54a596484

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.

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