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Submission Details
Severity: medium
Valid

Missing Slashing Mechanism for Malicious Oracle Validators

abhishekthakur

Summary

The LLMOracleRegistry lacks a slashing mechanism for malicious or consistently incorrect validators, allowing them to retain their staked tokens despite malicious behavior or poor performance.

Vulnerability Details

https://github.com/Cyfrin/2024-10-swan-dria/blob/main/contracts/llm/LLMOracleRegistry.sol

https://github.com/Cyfrin/2024-10-swan-dria/blob/main/contracts/llm/LLMOracleCoordinator.sol

Current staking mechanism in LLMOracleRegistry:

contract LLMOracleRegistry {
mapping(address oracle => mapping(LLMOracleKind => uint256 amount)) public registrations;
​
function register(LLMOracleKind kind) public {
uint256 amount = getStakeAmount(kind);
if (isRegistered(msg.sender, kind)) {
revert AlreadyRegistered(msg.sender);
}
token.transferFrom(msg.sender, address(this), amount);
registrations[msg.sender][kind] = amount;
}
​
function unregister(LLMOracleKind kind) public returns (uint256 amount) {
amount = registrations[msg.sender][kind];
if (amount == 0) {
revert NotRegistered(msg.sender);
}
delete registrations[msg.sender][kind];
token.approve(msg.sender, token.allowance(address(this), msg.sender) + amount);
}
}

In LLMOracleCoordinator, validation scoring:

function finalizeValidation(uint256 taskId) private {
// Compute the score for this generation as the "inner-mean"
// and send rewards to validators that are within the range
uint256 innerSum = 0;
uint256 innerCount = 0;
for (uint256 v_i = 0; v_i < task.parameters.numValidations; ++v_i) {
uint256 score = scores[v_i];
if ((score >= _mean - _stddev) && (score <= _mean + _stddev)) {
innerSum += score;
innerCount++;
// send validation fee to the validator
_increaseAllowance(validations[taskId][v_i].validator, task.validatorFee);
}
}
}

Issues with current system:

  1. No Penalty for Bad Actors:

    • Validators can provide incorrect validations with no consequence

    • Can unregister and withdraw full stake even after malicious behavior

    • No history tracking of validator performance

  2. Economic Attack Vectors:

    • Validators can collude to manipulate scores

    • Cost of attack is only gas fees, stake is fully recoverable

    • No economic deterrent against manipulation

  3. Missing Performance Tracking:

    • No mechanism to track validator accuracy over time

    • No cumulative scoring system

    • No way to identify consistently poor performers

Impact

It has several impacts on the protocol -

  1. Economic Security:

    • No financial deterrent against malicious behavior

    • Protocol relies solely on stake locking without slashing

    • Cost of attack is minimal (only gas fees)

  2. Data Quality:

    • No incentive for high-quality validations

    • Potential for sustained incorrect validations

    • Risk of coordinated validation manipulation

  3. Oracle Reliability:

    • Reduced trust in oracle system

    • No mechanism to remove bad actors

    • Potential for validation market manipulation

Tools Used

Manual Review

Recommendations

Here are few recommendations -

Implement Slashing Mechanism:

contract LLMOracleRegistry {
struct ValidatorInfo {
uint256 stake;
uint256 slashableAmount;
uint256 lastSlashTime;
uint256 incorrectValidations;
}
mapping(address => ValidatorInfo) public validatorInfo;
function slash(address validator, uint256 amount) external onlyCoordinator {
ValidatorInfo storage info = validatorInfo[validator];
require(info.stake >= amount, "Insufficient stake");
info.stake -= amount;
info.slashableAmount += amount;
info.lastSlashTime = block.timestamp;
info.incorrectValidations++;
if (info.incorrectValidations > MAX_INCORRECT_VALIDATIONS) {
_forceUnregister(validator);
}
}
}

  • Implement Cooldown Period:

contract LLMOracleRegistry {
uint256 public constant COOLDOWN_PERIOD = 21 days;
function unregister(LLMOracleKind kind) public returns (uint256 amount) {
ValidatorInfo storage info = validatorInfo[msg.sender];
require(block.timestamp >= info.lastSlashTime + COOLDOWN_PERIOD, "Cooldown period active");
// ... rest of unregister logic
}
}
Updates

Lead Judging Commences

inallhonesty Lead Judge 12 months ago
Submission Judgement Published
Validated
Assigned finding tags:

There is no oracle whitelisting

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