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Addition of Blockchain Security Templates
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To satisfy the additions raised within VRT Issue 426 - bugcrowd/vulnerability-rating-taxonomy#426
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RRudder committed Dec 6, 2024
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# Guidance

Provide a step-by-step walkthrough with a screenshot on how you exploited the vulnerability. This will speed up triage time and result in faster rewards. Please include specific details on where you identified the vulnerability, how you identified it, and what actions you were able to perform as a result.

Attempt to escalate the vulnerability to perform additional actions. If this is possible, provide a full Proof of Concept (PoC).
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# Recommendation(s)

Implementing the following defensive measures can prevent and limit the impact of the vulnerability:

- Use robust cryptographic mechanisms to validate cross-chain proofs and transactions.
- Implement multi-signature or consensus-based verification for bridge transactions.
- Regularly audit bridge validation and verification logic to identify weaknesses.
- Incorporate monitoring systems to flag and halt suspicious cross-chain activity.
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This misconfiguration occurs when a blockchain bridge fails to rigorously validate cross-chain transactions or asset transfers. This can arise from incomplete verification of cryptographic proofs, inadequate validation of source chain data, or flawed consensus mechanisms. An attacker can exploit this vulnerability to forge transactions, double-spend assets, or compromise the integrity of cross-chain interactions.

**Business Impact**

Improper validation in blockchain bridges can lead to significant financial losses, cross-chain instability, and diminished trust in the platform. Exploits may propagate vulnerabilities across multiple chains, magnifying their impact and eroding user confidence.

**Steps to Reproduce**

1. Navigate to the following URL: {{URL}}
1. Analyze the bridge's transaction validation and verification logic.
2. Submit a cross-chain transaction with forged or incomplete data.
3. Observe if the bridge accepts and processes the invalid transaction.
4. Attempt to manipulate or double-spend assets through the bridge.
5. Confirm that the bridge fails to detect or reject the invalid transaction.

**Proof of Concept**

The screenshot(s) below demonstrate(s) the vulnerability:
>
> {{screenshot}}
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# Guidance

Provide a step-by-step walkthrough with a screenshot on how you exploited the vulnerability. This will speed up triage time and result in faster rewards. Please include specific details on where you identified the vulnerability, how you identified it, and what actions you were able to perform as a result.

Attempt to escalate the vulnerability to perform additional actions. If this is possible, provide a full Proof of Concept (PoC).
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# Recommendation(s)

Implementing the following defensive measures can prevent and limit the impact of the vulnerability:

- Implement secure default settings and restrict administrative access to nodes and infrastructure.
- Regularly audit and validate network configurations against industry best practices.
- Use automated tools to detect and resolve misconfigurations in real time.
- Harden consensus mechanisms by enforcing robust cryptographic standards and validating peer integrity.
- Monitor network activity to detect and mitigate potential exploits stemming from misconfigurations.
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Blockchain Infrastructure Misconfiguration refers to weaknesses in the foundational components of a blockchain system, including nodes, consensus mechanisms, network configurations, and data integrity protocols. This can occur due to improper setup, insufficient security measures, or lack of adherence to best practices for infrastructure design and maintenance. Misconfigurations in this category can lead to systemic vulnerabilities, enabling attackers to disrupt the network, manipulate data, or exploit functionality. An attacker can leverage these misconfigurations to cause denial of service, compromise consensus, or gain unauthorized control over network operations.

**Business Impact**

Infrastructure misconfigurations can undermine the reliability and security of the blockchain network, leading to downtime, financial losses, and erosion of trust among users and stakeholders. Such vulnerabilities can damage the reputation of the platform, expose sensitive data, and disrupt dependent decentralized applications.

**Steps to Reproduce**

1. Navigate to the following URL: {{URL}}
1. Identify deviations from security best practice in the configuration settings of nodes and network infrastructure {{explanation of where + screenshot}}
1. Attempt to exploit weak or missing authentication for administrative access to nodes
1. Simulate malformed transactions or messages to test the system's error-handling mechanisms
1. Observe that the identified misconfigurations result in unauthorized access, operational disruptions, or data manipulation

**Proof of Concept**

The screenshot(s) below demonstrate(s) the vulnerability:
>
> {{screenshot}}
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# Guidance

Provide a step-by-step walkthrough with a screenshot on how you exploited the vulnerability. This will speed up triage time and result in faster rewards. Please include specific details on where you identified the vulnerability, how you identified it, and what actions you were able to perform as a result.

Attempt to escalate the vulnerability to perform additional actions. If this is possible, provide a full Proof of Concept (PoC).
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# Recommendation(s)
Implementing the following defensive measures in the decentralized application can prevent and limit the impact of the vulnerability:

- Ensure that there are checks on price and liquidity changes to prevent sudden manipulation caused by flash loans.
- Implement replay auditing of smart contracts to detect vulnerabilities exploitable by flash loans.
- Ensure accurate, real-time price feeds from decentralized oracles to mitigate manipulation.
- Enable circuit breakers to pause the system in the event of large, suspicious transactions.
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A flash loan allows the borrowing of a large sum of capital without collateral as the loan must be returned to the lending platform at the end of a transaction block. A flash loan attack involves an attacker borrowing large amounts to manipulate asset prices in liquidity pools or decentralized exchanges, arbitraging between manipulated prices across protocols, or exploiting vulnerabilities in smart contracts to drain liquidity. Through these methods an attacker is able to manipulate the logic of asset bonding curves and destabilize market prices.

**Business Impact**

Flash loan attacks can result in significant financial losses as well as a loss of user trust, and damage to the platform’s reputation. Additionally, businesses may face legal consequences and regulatory scrutiny which can lead to financial losses and penalties.

**Steps to Reproduce**

1. Navigate to the following URL: {{URL}}
1. I Identify a Decentralized Finance (DeFi) protocol that offers flash loans with unsecured capital: {{define specific protocol}}
1. Borrow a large flash loan from a liquidity pool without collateral

1. Perform the following actions which show the manipulated asset prices, arbitrage strategies or exploits to extra value from the manipulated prices or protocol: {{list additional actions}}

**Proof of Concept**

The screenshot(s) below demonstrate(s) the vulnerability:
>
> {{screenshot}}
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# Guidance

Provide a step-by-step walkthrough with a screenshot on how you exploited the vulnerability. This will speed up triage time and result in faster rewards. Please include specific details on where you identified the vulnerability, how you identified it, and what actions you were able to perform as a result.
Attempt to escalate the vulnerability to perform additional actions. If this is possible, provide a full Proof of Concept (PoC).
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# Recommendation(s)

Implementing the following defensive measures in the decentralized application can prevent and limit the impact of the vulnerability:
- Implement checks and balances to ensure user withdrawals or payouts are only processed if they align with their actual balance.
- Ensure all arithmetic operations (addition, subtraction) are performed using SafeMath or similar libraries to avoid overflow and underflow errors.
- Perform rigorous code audits to identify and fix accounting logic vulnerabilities before deploying smart contracts.
- Conduct extensive testing of smart contracts, including edge cases, to ensure the integrity of all financial operations.
- Use precise rounding mechanisms in financial calculations to avoid discrepancies in user balances.
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A function-level accounting error occurs when a smart contract in a Decentralized Finance (DeFi) protocol improperly calculates balances, interests, or other transactional values due to a coding flaw. This vulnerability typically arises from incorrect implementation of financial functions, such as rounding errors, incorrect updating of balance variables, or failing to account for edge cases in transactions. An attacker can exploit a function-level accounting error in a function responsible for updating user balances, allowing them to withdraw more funds than they are entitled to.

**Business Impact**

Function-level accounting errors can lead to significant financial discrepancies, resulting in loss of funds, misallocation of rewards, or improper liquidation of assets. This can cause reputational harm to the DeFi platform, as users may lose trust in the platform's integrity and security. Furthermore, if the error is exploited at scale, it could drain liquidity or destabilize the entire protocol.

**Steps to Reproduce**

1. Navigate to the following URL: {{URL}}
1. Review the DeFi protocol's smart contract code for financial functions
1. Identify an edge case or flaw in the logic {{Describe the specific underflow, overflow, or rounding issue identified}}
1. Manipulate the inputs to the vulnerable function to trigger the flaw
1. Observe that the protocol fails to update balances properly which results in an incorrect payout
> {{screenshot}}
**Proof of Concept**

The screenshot(s) below demonstrate(s) the vulnerability:
>
> {{screenshot}}
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# Guidance

Provide a step-by-step walkthrough with a screenshot on how you exploited the vulnerability. This will speed up triage time and result in faster rewards. Please include specific details on where you identified the vulnerability, how you identified it, and what actions you were able to perform as a result.

Attempt to escalate the vulnerability to perform additional actions. If this is possible, provide a full Proof of Concept (PoC).
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# Recommendation(s)

Implementing the following defensive measures in the decentralized application can prevent and limit the impact of the vulnerability:

- Design governance mechanisms that distribute voting power more evenly to prevent centralization or manipulation.
- Restrict the use of flash-loaned tokens in governance votes to prevent manipulation.
- Introduce a time delay between proposal submission and vote execution to limit flash loan exploitation.
- Require longer token holding periods before tokens can be used in governance decisions to prevent vote buying.
- Regularly perform governance audits to identify and mitigate risks related to governance manipulation.
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Governance typically involves token holders voting on protocol changes, such as interest rates or code updates. Improper implementation of governance occurs when a Decentralized Finance (DeFi) protocol’s governance mechanism is flawed, allowing an attacker to manipulate decision making processes. This occurs when governance tokens can be easily manipulated or concentrated (e.g., through flash loans or vote buying) and can result in arbitrary changes to interest rates, fees, or smart contract logic.

**Business Impact**

This vulnerability can destabilize the protocol, leading to reputational damage, loss of user funds, and potential financial instability. Additionally, businesses may face legal consequences and regulatory scrutiny which can lead to financial losses and penalties.

**Steps to Reproduce**

1. Navigate to the following URL: {{URL}}
1. Identify the governance mechanism within the DeFi protocol {{Describe the specific governance protocol}}
1. Acquire a large amount of governance tokens {{Describe the method identified and provide steps to reproduce this}}
1. Propose a governance change or vote on an existing proposal
> {{screenshot}}
1. Use the acquired tokens to influence the vote
> {{screenshot}}
**Proof of Concept**

The screenshot(s) below demonstrate(s) the vulnerability:
>
> {{screenshot}}
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# Guidance

Provide a step-by-step walkthrough with a screenshot on how you exploited the vulnerability. This will speed up triage time and result in faster rewards. Please include specific details on where you identified the vulnerability, how you identified it, and what actions you were able to perform as a result.

Attempt to escalate the vulnerability to perform additional actions. If this is possible, provide a full Proof of Concept (PoC).
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# Recommendation(s)

Implementing the following defensive measures in the decentralized application can prevent and limit the impact of the vulnerability:

- Use failsafes to detect abnormal pricing shifts and pause the protocol if manipulation is detected. Set thresholds for price volatility ranges for all assets within the dApp (these can be based on historical data, statistical models, and normal market activity).
- Ensure that accurate and real-time price feeds are used from decentralized oracles.
- Use time weighted average price or volume weighted average price to smooth short-term volatility.
- Enable circuit breakers to pause the system in the event of large, suspicious transactions.
- Continuously monitor for sudden spikes or reductions in liquidity or trading volumes that might signal manipulation.
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A pricing oracle manipulation attack occurs when an attacker manipulates the data provided by price oracles to distort the prices of assets within a Decentralized Finance (DeFi) protocol. The vulnerability stems from the reliance on price oracles to determine asset values, particularly when these oracles draw data from a single or few external sources. Attackers may, for example, provide false liquidity to a decentralized exchange to artificially inflate or deflate the price of an asset, or target oracles with delayed price updates to profit from manipulated pricing.

**Business Impact**

Manipulation of price oracles can destabilize the platform by causing false valuations of assets, resulting in unfair liquidations, arbitrage, or financial loss for users. This can harm the integrity of the DeFi protocol, eroding user trust, and causing significant financial losses. Additionally, legal risks arise if manipulated pricing leads to large-scale market instability or fraud within the platform.

**Steps to Reproduce**

1. Navigate to the following URL: {{URL}}
1. Identify a DeFi platform relying on a price oracle for asset valuation: {{define specific platform}}
1. Determine that the price oracle uses a centralized or single-source price feed
> {{screenshot}}
1. Manipulate the liquidity on the platform or provide false data to the oracle
1. Observe price distortions and execute trades based on the manipulated prices to profit
> {{screenshot}}
1. Liquidate positions or perform arbitrage before the oracle updates or corrects the prices

**Proof of Concept**

The screenshot(s) below demonstrate(s) the vulnerability:
>
> {{screenshot}}
**Proof of Concept**

The screenshot(s) below demonstrate(s) the vulnerability:
>
> {{screenshot}}
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# Guidance

Provide a step-by-step walkthrough with a screenshot on how you exploited the vulnerability. This will speed up triage time and result in faster rewards. Please include specific details on where you identified the vulnerability, how you identified it, and what actions you were able to perform as a result.

Attempt to escalate the vulnerability to perform additional actions. If this is possible, provide a full Proof of Concept (PoC).
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# Recommendation(s)

Implementing the following defensive measures can prevent and limit the impact of the vulnerability:

- Use decentralized and reliable oracle systems to prevent manipulation.
- Conduct regular audits of smart contracts and financial logic.
- Implement failsafes and limits to mitigate abnormal financial activities.
- Monitor transaction patterns for signs of exploitation and act swiftly to mitigate risks.
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DeFi security misconfigurations refer to flaws in the design or implementation of decentralized finance (DeFi) protocols, such as flash loan vulnerabilities, oracle manipulation, or improper accounting logic. These issues can compromise the financial integrity and operational stability of the protocol. An attacker can exploit these misconfigurations to manipulate token prices, drain liquidity pools, or execute unauthorized transactions.

**Business Impact**

DeFi misconfigurations can lead to substantial financial losses for the protocol and its users, damage to reputation, and a loss of trust in the platform. These vulnerabilities may also result in regulatory scrutiny and legal liabilities for the operators.

**Steps to Reproduce**

1. Navigate to the following URL: {{URL}}
1. Analyze the DeFi protocol’s smart contracts and logic for vulnerabilities
1. Test token price manipulation through oracle inputs or other means.
1. Attempt to exploit liquidity pools using flash loans or reentrancy methods.
1. Observe that unauthorized or unintended transactions can be executed.

**Proof of Concept**

The screenshot(s) below demonstrate(s) the vulnerability:
>
> {{screenshot}}
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# Guidance

Provide a step-by-step walkthrough with a screenshot on how you exploited the vulnerability. This will speed up triage time and result in faster rewards. Please include specific details on where you identified the vulnerability, how you identified it, and what actions you were able to perform as a result.

Attempt to escalate the vulnerability to perform additional actions. If this is possible, provide a full Proof of Concept (PoC).
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# Recommendation(s)

Implementing the following defensive measures in the decentralized application can prevent and limit the impact of the vulnerability:

- Use strict signature verification methods to check that the sender’s public key matches the signature and that no modifications of the transaction details can occur.
- Implement replay protection mechanisms to prevent attackers from reusing valid signatures for unauthorized transactions.
- Use established cryptographic libraries that handle signature verification securely and correctly.
- Conduct regular security audits of smart contracts and their transaction handling mechanisms to identify potential weaknesses in signature validation.
- For high value or sensitive transactions, consider implementing multi-signature authorization that include multiple private keys to sign off on the action before it is executed.
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