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362 changes: 362 additions & 0 deletions SecurityAuditJun2025.md
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# Argochain Security Audit Report

**Date**: June 16, 2025
**Auditor**: Pavon Dunbar
**Scope**: Complete Argochain codebase security review
**Severity Levels**: Critical | High | Medium | Low

## 🚨 Executive Summary

This security audit of the Argochain blockchain codebase has identified **multiple critical vulnerabilities** that pose significant risks to the network's security and user funds. The audit reveals several issues that could lead to:

- Unlimited token minting/theft
- Denial of service attacks
- Memory safety violations
- Replay attacks on cross-chain operations

**⚠️ RECOMMENDATION: This codebase is NOT ready for production deployment and requires immediate security fixes.**

---

## 🔴 Critical Vulnerabilities

### 1. Signature Verification Vulnerability in Cross-Chain Transfers

**Severity**: 🔴 **CRITICAL**
**Location**: `frame/pallet-counter/src/lib.rs:179-237`
**CVSS Score**: 9.8 (Critical)

#### Description
The EVM to Substrate transfer function contains a critical signature verification flaw that allows replay attacks and signature forgery.

#### Vulnerable Code
```rust
let message = format!("Transfer {} AGC from 0x{:x} to Substrate", amount_u128, evm_address);
let prefix = "\x19Ethereum Signed Message:\n";
let message_len = format!("{}", message.len());
let message_to_sign = format!("{}{}{}", prefix, message_len, message);
```

#### Vulnerabilities
- **Replay Attack**: No nonce or timestamp in signed message
- **Cross-Chain Replay**: Same signature can be reused across different contexts
- **Weak Message Construction**: Predictable format makes forgery easier
- **Missing Context**: No block hash, chain ID, or recipient validation

#### Impact
- Attackers can replay signatures to drain EVM balances multiple times
- Cross-chain signature reuse possible
- Potential for unlimited token minting

#### Recommended Fix
```rust
let message = format!("Transfer {} AGC from 0x{:x} to {} on chain {} at block {} nonce {}",
amount_u128, evm_address, substrate_account, chain_id, block_hash, nonce);
```

---

### 2. Unsafe Memory Operations

**Severity**: 🔴 **CRITICAL**
**Location**: `precompiles/src/evm/handle.rs:118`
**CVSS Score**: 8.5 (High)

#### Description
Unsafe memory transmutation without proper lifetime validation could lead to memory safety violations.

#### Vulnerable Code
```rust
unsafe {
EVM_CONTEXT::using(
core::mem::transmute::<&'a mut dyn PrecompileHandle, &'static mut dyn PrecompileHandle>(
precompile_handle,
),
mutator,
)
}
```

#### Impact
- Memory safety violations
- Potential use-after-free vulnerabilities
- Runtime crashes or undefined behavior

#### Recommended Fix
- Implement proper lifetime management
- Use safer alternatives to `transmute`
- Add comprehensive lifetime annotations

---

### 3. Panic-Based DoS Vectors

**Severity**: 🔴 **CRITICAL**
**Location**: `frame/evm/precompile/modexp/src/lib.rs` (multiple lines)
**CVSS Score**: 7.5 (High)

#### Description
Multiple panic calls in precompile code can be triggered by attackers to crash the runtime.

#### Vulnerable Code
```rust
panic!("Modexp::execute() returned error"); // TODO: how to pass error on?
```

#### Impact
- Runtime crashes through crafted EVM calls
- Denial of service attacks
- Network instability

#### Recommended Fix
- Replace all `panic!()` calls with proper error handling
- Implement graceful error recovery
- Return appropriate error codes instead of panicking

---

### 4. Insufficient Access Control for Critical Functions

**Severity**: 🔴 **CRITICAL**
**Location**: `frame/pallet-counter/src/lib.rs:80-105`
**CVSS Score**: 9.0 (Critical)

#### Description
Critical mint/burn functions rely solely on root access without additional security measures.

#### Vulnerable Code
```rust
#[pallet::call_index(0)]
pub fn mint(origin: OriginFor<T>, account: T::AccountId, amount: SubstrateBalanceOf<T>) -> DispatchResult {
ensure_root(origin)?; // Only check - no additional validation
T::SubstrateCurrency::deposit_creating(&account, amount);
Ok(())
}
```

#### Impact
- If root is compromised, unlimited token minting is possible
- No rate limiting or amount restrictions
- Single point of failure

#### Recommended Fix
- Implement multi-signature requirements
- Add time delays for large operations
- Implement amount limits and rate limiting
- Add emergency pause functionality

---

## 🟠 High-Risk Issues

### 5. Integer Overflow/Underflow Risks

**Severity**: 🟠 **HIGH**
**Locations**: Multiple files including `frame/base-fee/src/lib.rs`

#### Issues Found
- Base fee calculations can overflow (`BaseFeeOverflow` events)
- U256 to u128 conversions can truncate values
- Arithmetic operations lack proper bounds checking

#### Recommended Fix
- Use saturating arithmetic operations
- Add proper bounds checking for all numeric operations
- Implement comprehensive overflow protection

---

### 6. Insufficient Input Validation

**Severity**: 🟠 **HIGH**
**Location**: `frame/pallet-counter/src/lib.rs:258-300`

#### Description
Message validation in transfer functions is easily bypassed.

#### Vulnerable Code
```rust
let blacklisted_words = ["scam", "fraud", "hack", "illegal", "phishing"];
// Simple string contains check - easily bypassed
```

#### Impact
- Bypass content filtering with simple character substitution
- No proper length validation
- Missing encoding validation

#### Recommended Fix
- Implement regex-based content filtering
- Add proper input sanitization
- Implement comprehensive validation rules

---

### 7. Precompile Security Gaps

**Severity**: 🟠 **HIGH**
**Location**: `precompiles/src/precompile_set.rs`

#### Issues
- Complex recursive call handling without proper bounds
- Insufficient gas cost validation
- Missing access control for sensitive operations

#### Recommended Fix
- Implement proper recursion depth limits
- Add comprehensive gas cost validation
- Implement role-based access control for precompiles

---

## 🟡 Medium-Risk Issues

### 8. Unsafe RPC Method Exposure

**Severity**: 🟡 **MEDIUM**
**Locations**: Multiple RPC modules

#### Description
Several "unsafe" RPC methods are exposed that could leak sensitive information.

#### Recommended Fix
- Review all RPC method exposure
- Implement proper authentication for sensitive methods
- Add rate limiting for RPC calls

---

### 9. Database Error Handling

**Severity**: 🟡 **MEDIUM**
**Location**: `client/db/src/parity_db_adapter.rs:26`

#### Vulnerable Code
```rust
panic!("Critical database error: {:?}", e);
```

#### Impact
- Database errors cause runtime panics
- No graceful degradation

#### Recommended Fix
- Implement proper error handling for database operations
- Add retry mechanisms for recoverable errors
- Implement graceful degradation strategies

---

## 📋 Detailed Recommendations

### Immediate Actions Required (Critical Priority)

1. **🚨 Fix Signature Verification**
- Add nonce/timestamp to prevent replay attacks
- Include recipient address and chain ID in signed messages
- Implement proper signature validation context

2. **🚨 Remove All Panic Calls**
- Audit entire codebase for `panic!()` calls
- Replace with proper error handling
- Implement graceful error recovery

3. **🚨 Enhance Access Controls**
- Implement multi-signature requirements for critical functions
- Add time delays for sensitive operations
- Create proper authorization layers

4. **🚨 Memory Safety Review**
- Review all `unsafe` code blocks
- Implement safer alternatives where possible
- Add comprehensive lifetime management

### Security Enhancements (High Priority)

1. **Input Validation Framework**
- Implement comprehensive input sanitization
- Add proper bounds checking for all numeric operations
- Create centralized validation utilities

2. **Error Handling Standardization**
- Implement consistent error handling patterns
- Add proper logging for security events
- Create error recovery mechanisms

3. **Access Control Framework**
- Implement role-based access control
- Add permission management system
- Create audit trails for sensitive operations

### Long-term Security Measures

1. **Security Testing**
- Implement comprehensive unit tests for edge cases
- Add integration tests for security scenarios
- Implement fuzz testing for input validation

2. **Monitoring and Alerting**
- Monitor for unusual transaction patterns
- Alert on large mint/burn operations
- Track precompile usage patterns
- Log all critical function calls

3. **External Security Measures**
- Conduct formal verification for critical pallets
- Engage external security auditors
- Establish bug bounty program
- Regular security reviews

---

## 🛡️ Security Best Practices

### Development Practices
- [ ] Implement secure coding guidelines
- [ ] Regular security code reviews
- [ ] Automated security testing in CI/CD
- [ ] Dependency vulnerability scanning

### Runtime Security
- [ ] Implement emergency pause mechanisms
- [ ] Add circuit breakers for critical functions
- [ ] Rate limiting for sensitive operations
- [ ] Comprehensive event logging

### Operational Security
- [ ] Multi-signature governance
- [ ] Staged deployment process
- [ ] Incident response procedures
- [ ] Regular security assessments

---

## 📊 Risk Assessment Summary

| Severity Level | Count | Priority |
|----------------|-------|----------|
| 🔴 Critical | 4 | Immediate Fix Required |
| 🟠 High | 3 | Fix Before Production |
| 🟡 Medium | 2 | Address Soon |
| **Total** | **9** | **Not Production Ready** |

---

## 📝 Conclusion

The Argochain codebase contains multiple **critical security vulnerabilities** that make it unsuitable for production deployment. The most severe issues include:

1. **Signature verification flaws** enabling replay attacks
2. **Memory safety violations** in unsafe code blocks
3. **DoS vectors** through panic-based crashes
4. **Insufficient access controls** for critical functions

**⚠️ STRONG RECOMMENDATION**: Do not deploy this codebase to production until all critical and high-risk vulnerabilities are addressed. Consider engaging professional blockchain security auditors for a comprehensive review before any mainnet launch.

---

## 📞 Contact

For questions about this security audit or to discuss remediation strategies, please create an issue in this repository or contact the security team.

**Note**: This audit was conducted on the current codebase state. Regular security reviews should be performed as the codebase evolves.
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