Storage Proofs

Summary

The contract IBlockHashOracle.vyi is responsible for providing block hashes and state roots. However, it relies entirely on external sources without additional validation mechanisms. This introduces a critical security risk where a compromised or manipulated oracle could supply incorrect block hashes or state roots, leading to maliciously accepted fake proofs.

Vulnerability Details

Issue: Lack of Secondary Validation for State Root

• The functions get_block_hash() and get_state_root() directly return values provided by the oracle.

• There is no secondary validation to ensure that the returned state root is correct and untampered.

• If the oracle is compromised or manipulated, it could return incorrect state roots that lead to the acceptance of fake proofs.

• A malicious actor could exploit this to introduce invalid state transitions in contracts that depend on this oracle for verification.

Affected Code:

• These functions return critical verification data without cross-checking their authenticity.

Impact

• If an attacker gains control over the oracle, they can manipulate state proofs to execute unauthorized actions, bypass security checks, and introduce incorrect financial or governance decisions.

• This can lead to fraudulent transactions, stolen funds, or incorrect protocol updates.

• Downstream contracts relying on this oracle would be compromised, potentially affecting an entire ecosystem of dependent protocols.

Tools Used

• Manual Code Review

• Analysis of On-Chain Oracle Dependencies

Recommendations

1. Introduce Secondary Validation:

   • Require the oracle to submit multiple confirmations of state root values from different independent sources.

   • Implement a delay mechanism where multiple historical block hashes must be provided before a new one is accepted.

2. Multi-Signature Governance:

   • Require multiple trusted parties to sign off on critical state root updates before they are accepted.

3. Use Multiple Oracle Sources:

   • Instead of trusting a single oracle, aggregate data from multiple oracles and use a consensus mechanism to determine the correct state root.

4. Logging and Monitoring:

   • Implement logging of returned state roots and set up alerts for suspicious discrepancies.