EVM - TAC

Prepared by:

HALBORN

Last Updated 06/11/2025

Date of Engagement: May 21st, 2025 - May 30th, 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. Caveats
5. Risk methodology
6. Scope
7. Assessment summary & findings overview
8. Findings & Tech Details

8.1 Incorrect txhash assignment in ethheaderfromtendermint leads to malformed headers
8.2 Misassignment of commissionrates fields in newmsgcreatevalidator
8.3 Hardcoded loopback binding in newwebsocketsserver prevents intended network exposure
8.4 Using vulnerable dependencies
8.5 Division by zero in custom inflation formulas

1. Introduction

TAC engaged Halborn to conduct a security assessment of their smart contracts from May 21st, 2025 to May 30th, 2025. The assessment focused on specific changes made to a Cosmos module provided to the Halborn team. Commit hashes and additional details are available in the Scope section of this report.

2. Assessment Summary

The Halborn team assigned two full-time security engineers to evaluate the security of the merge requests. These engineers are experts in blockchain and smart contract security, possessing advanced skills in penetration testing, smart contract auditing, and extensive knowledge of multiple blockchain protocols.

The objectives of this assessment were to:

Verify that the Golang components function as intended.
Identify potential security vulnerabilities within the Cosmos application.

In summary, Halborn identified some improvements to reduce the likelihood and impact of risks, which were acknowledged by the TAC team . The main ones were the following:

Reverse the condition so that TxHash consistently reflects the intended header.
Assign rpcAddr directly from cfg.JSONRPC.Address to ensure the server binds to the configured host and port.
Assign each CommissionRates field from its corresponding Commission field.

3. Test Approach and Methodology

Halborn employed a combination of manual and automated security testing to balance efficiency, timeliness, practicality, and accuracy within the scope of the custom modules. Manual testing was used to uncover logical, procedural, and implementation flaws, while automated testing enhanced coverage and quickly identified deviations from security best practices. The following phases and tools were utilized during the assessment:

Research into architecture and purpose.
Static analysis of the scoped repository and imported functions using tools such as staticcheck, gosec, unconvert, codeql, ineffassign, and semgrep.
Manual assessment to identify security vulnerabilities within the codebase.
Verification of codebase correctness.
Dynamic analysis of files and modules within scope.

4. Caveats

CosmosEVM security assessment is limited to the files directly affected by the four Pull Requests listed in the Sources section. Only changes introduced or modified in this comparison were considered; any pre-existing vulnerabilities or issues outside these specific files are beyond the scope of this review. Additionally, the audit does not cover dependencies, configuration files, or runtime environments. Therefore, findings and recommendations apply solely to the code and files added, removed, or modified in this branch comparison.

TacChain is a fork of Cosmos EVM with minimal changes. This audit focused exclusively on the following modifications:

Custom Inflation Formulas
ERC20
WASM Removal

5. 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.

5.1 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:

$E = \prod m_e$

5.2 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:

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

5.3 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

6. SCOPE

REPOSITORIES

(a) Repository: tacchain

(b) Assessed Commit ID: ae44220

app/app.go
app/export.go
app/ante.go

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