EOS EVM Contract Drain Vulnerability

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A critical vulnerability was uncovered and resolved in the EOS EVM before it could be exploited. The vulnerability, if exploited, would have allowed draining all contracts storing EOS across the trustless bridge. According to the report, the vulnerability was never exploited.

About EOS Blockchain

The EOS (Electro-Optical System) blockchain is "a highly performant open-source blockchain platform, built to support and operate safe, compliant, and predictable digital infrastructures." EOS launched in June 2018 with a $4.1 billion USD initial coin offering. The core team of EOS is based in the Cayman Islands.

The core team behind EOS is “Block.one”, which is based in the Cayman Islands. Brendon Blumer, the CEO, has been involved in blockchain since 2014. He has previously been involved in companies that dealt with currency exchanges in MMORPGs and in real estate. Dan Larimer, is the CTO. He is the creator of delegated proof-of-stake and decentralized autonomous organizations aka DAOs. He is the also the man behind BitShares and Steem.

The EOS platform allows the development of decentralized blockchain applications in a similar manner to Ethereum and was initially dubbed the ethereum killer.

"EOS is a platform that uses the blockchain technology for the development of decentralized applications (dapps), very similar to Ethereum in function. As a matter of fact, supporters have dubbed it as the “Ethereum killer”. By providing an operating-system-like set of services and features that dapps can make use of, it makes dapp development very easy."

About EOS EVM

EVM, or the Ethereum Virtual Machine, is a core computation engine of Ethereum which powers the blockchain and smart contracts. The EOS EVM is a compatibility layer that's designed to allow EOS to mimic the same functionality as the EVM. "It enables developers to deploy and run their applications on top of the EOS blockchain infrastructure but to build, test, and debug those applications using the common languages and tools they are used to using with other EVM compatible blockchains."

The EOS EVM allows EOS developers access to use all of the tools and code which are available for Ethereum development on EOS. There are five parts to the EOS EVM:

• A fork of the Blockscout blockchain explorer with adaptations for the EOS EVM.
• The EVM bridge front-end, a front-end which allows for the operation of the EVM trustless bridge.
• The EOS EVM contract, an Antelope smart contract implementing the main runtime for the EVM.
• The EOS EVM Node and RPC (remote procedure call). This allows for the operation of EVM nodes and remote interaction with those nodes.
• The transaction wrapper, an Node.js application to service the eth_sendRawTransaction and eth_gasPrice functions.

A press release for EOS explains more about the EVM use case.

Building applications on different blockchains can be challenging due to the competition for limited resources and end users. One major obstacle is the inflow of developers and availability of familiar and easy-to-use tooling. This can limit the speed at which an ecosystem can develop and the scale at which applications can be built.

EOS EVM aims to address these challenges by enabling Ethereum-like transactions on the EOS Network through a smart contract-based Ethereum Virtual Machine (EVM), allowing developers to seamlessly build Ethereum-based applications on EOS to take advantage of its world class performance, reliability, and liquidity.

With the introduction of EOS EVM, Ethereum-based projects can tap into the previously inaccessible audience and liquidity of EOS without needing to rewrite their code in C++. As a result, users will now get to enjoy enhanced user experiences on EOS without losing out on Ethereum’s battle-tested open source code, tooling, libraries, and SDKs.

Getting Blockchain Information

The EOS EVM allows for a blockchain which is built in a deterministic way. Through the RPC, clients such as MetaMask can gain a read-only view of the blockchain.

Sending EVM-Compatible Transactions

Clients can push transactions via a proxy and the transaction wrapper. This encapsulates the EVM transaction into an Antelope smart contract transaction. The EVM transactions are then validated and executed by the EOS EVM smart contract deployed in the EOS blockchain.

The Reality

The EOS EVM contained a critical security vulnerability. The security vulnerability related to "state objects" tracking the reserved addresses of the trustless bridge. The tracking was not properly being undone in the case where the EVM execution context was reverted.

The vulnerability could potentially allow an attacker to illegitimately drain all of the EOS stored by the EOS EVM smart contract across the trustless bridge.

TBD - Need to fill in more details on the exact exploit and how it was introduced into the source code.

The vulnerability primarily affected the EOS EVM smart contract, although the EOS EVM node, and the EOS EVM RPC would expect the failed behaviour.

What Happened

The vulnerability was kept confidential and patched behind the scenes by the EOS team. They released an update to the EOS EVM on May 15th.

Key Event Timeline - EOS EVM Contract Drain Vulnerability

Date	Event	Description
April 21st, 2022 8:30:00 AM MDT	CryptoSlate Article	The EOS EVM is announced in a CryptoSlate article, referencing an announcement that work on the Trust EVM was already completed.
January 18th, 2023 7:24:00 AM MST	Yves La Rose Announcement	Yves La Rose announces the EOS EVM on Twitter.
January 20th, 2023 8:09:20 AM MST	EOS Network Foundation Announcement	The EOS Network foundation announces major changes to the EOS EVM system.
March 24th, 2023 9:48:38 AM MDT	EOS EVM Architecture Deep Dive	The EOS Network Foundation publishes a deep dive into the EOS EVM architecture.
April 12th, 2023 2:55:11 PM MDT	EOS EVM 0.4.0 Release Notes Published	The release notes for the EOS EVM 0.4.0 are published.
May 11th, 2023 12:20:00 AM MDT	taokayan Provides Silkwork Stability Fix	EOS developer taokayan commits a fix to the silkworm module.
May 11th, 2023 7:50:00 PM MDT	Version Bumped To 0.4.2	The EOS EVM software version is bumped up to 0.4.2.
May 15th, 2023 7:07:00 PM MDT	Upgrade Available	The upgrage to the EVM is made available on Twitter.
May 16th, 2023	Included In SlowMist	The vulnerability is included as an exploit on the SlowMist website.
May 22nd, 2023 7:37:11 AM MDT	EOS GO Publication on Vulnerability	The EOS GO publishes information about the vulnerability in the weekly newsletter.

Technical Details

Some information is provided in the release notes.

"The security vulnerability is related to the state objects tracking the reserved addresses of the trustless bridge and how they were not properly being undone in the case of an EVM execution context being reverted. If exploited, it could potentially allow an attacker to illegitimately drain all of the EOS stored by the EOS EVM Contract across the trustless bridge."

While there are several updates in 0.4.2, the specific modifications to correct the vulnerability apply to two separate files within the silkworm module:

core/silkworm/state/delta.cpp

void CreateDelta::revert(IntraBlockState& state) noexcept {
    if(is_reserved_address(address_))
        state.reserved_objects_.erase(address_);
    else
        state.objects_.erase(address_);
}

void UpdateDelta::revert(IntraBlockState& state) noexcept {
    if(is_reserved_address(address_))
        state.reserved_objects_[address_] = previous_;
    else
        state.objects_[address_] = previous_;
}

void UpdateBalanceDelta::revert(IntraBlockState& state) noexcept {
    if(is_reserved_address(address_))
        state.reserved_objects_[address_].current->balance = previous_;
    else
        state.objects_[address_].current->balance = previous_;
}

core/silkworm/stagedsync/stage_hashstate.cpp

Stage::Result HashState::write_changes_from_changed_addresses(db::RWTxn& txn, const ChangedAddresses& changed_addresses) {
    throw_if_stopping();

    if (changed_addresses.size() == 0) return Stage::Result::kSuccess;

TBD - Need more details on the exploit itself. For example, how could it be exploited by an attacker?

Total Amount Lost

There were no funds lost since the EOS EVM smart contract was patched prior to a public release of any information. The vulnerability does not appear to have been exploited on either the EOS EVM testnet or mainnet. Therefore, it was possible to treat the fix as simpler retroactive change of the EVM. It does not appear that any bounty was paid out for discovering the vulnerability either.

Immediate Reactions

According to release notes, three developers @yarkinwho, @spoonincode, and @taokayan were responsible for investigation and resolution of the vulnerability. Developer @taokayan was responsible for the actual proposal to resolve the vulnerability.

The EOS Network Foundation ultimately released version 0.4.2 of their Ethereum Virtual Machine, which resolved the vulnerability. This required an upgrade to the EVM smart contract, EVM nodes, and EVM RPC components.

While the resolution was technically a breaking change, this wasn't a fatal problem as the vulnerability had never been exploited.

Ultimate Outcome

The EOS Foundation announced the resolution on Twitter with a new version of the EVM being released for people to download.

EOS Foundation Announcement on Twitter

The EOS Foundation posted on Twitter to announce the resolution of the vulnerability.

EOS EVM v0.4.2 Released!

This release fixes a critical security vulnerability discovered in the EOS EVM.

The EOS EVM Contract, EOS EVM Node, and EOS EVM RPC for the EOS mainnet implementation have already been patched prior to this public release.

Required Upgrades

It was reported that there was no change required to the Application Binary Interface (ABI), making the smart contract upgrade easy.

"Upgrading EOS EVM Contract from v0.4.1 simply requires a setcode of the v0.4.2 contract. There are no changes to the ABI."

At the same time, the node and RPC services needed to have their binaries updated and then be restarted.

"Upgrading EOS EVM Node and EOS EVM RPC from v0.4.1 only requires restarting the services with the updated binaries."

Total Amount Recovered

No funds were lost in this case, and therefore no recovery was needed.

Ongoing Developments

There don't appear to be any remaining developments in this case. The original vulnerability has already been patched by the EOS team.

The fix to the security vulnerability is technically a breaking change to EOS EVM, so it is possible that existing clients may still continue to run the old version of the EVN client. However, the exploit was never exploited, and it is unlikely that an attacker would want to exploit in a way that is likely to only affect a portion of current nodes and be easily resolved by the remaining nodes upgrading. Any assets they gained would only exist on a fork state of the EVM.

Individual Prevention Policies

No funds were lost in this case, as the vulnerability was never exploited. However, there are still some strategies which can be undertaken to reduce the risk.

Avoid the use of smart contracts unless necessary. Minimize the level of exposure by removing or withdrawing assets whenever possible. Aim to choose smart contracts which have obtained third party security audits, preferably having been audited by at least three separate reputable firms. Pay attention to the audit reports, which smart contracts are covered, and whether the smart contract has been upgraded or modified since the report. Ensure that any administrative functions with the ability to remove funds from the smart contract are under the authority of a multi-signature wallet which is controlled by at least three separate and reputable entities.

Store the majority of funds offline. By offline, it means that the private key and/or seed phrase is exclusively held by you and not connected to any networked device. Examples of offline storage include paper wallets (seed phrase or key written down and deleted from all electronic media), hardware wallets, steel wallet devices, etc...

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

No funds were lost in this case, as the vulnerability was never exploited. Further scrutiny by platforms using the EOS blockchain may have helped to uncover the vulnerability before it was exploited. It is also important to place more assets, particularly key treasury assets, within a simpler multi-signature arrangement, which would typically have a lot less risk than more complex smart contracts.

All aspects of any platform should undergo a regular validation/inspection by experts. This validation should include a security audit of any smart contracts, reporting any risks to the backing (of any customer assets, ensuring treasuries or minting functions are properly secured under the control of a multi-signature wallet, and finding any inadequacies in the level of training or integrity of the team. The recommended interval is twice prior to launch or significant system upgrade, once after 3 months, and every 6 months thereafter. It is recommended that the third party performing the inspection not be repeated within a 14 month period.

All wallets, minting functions, and critical infrastructure should be implemented with a multi-signature requirement, with a recommended minimum of 3 signatures required. This means that making important changes or approving spending will require the keys held by at least 3 separate individuals within the organization to approve. The multi-signature should be implemented at the lowest layer possible, all key holders should have security training, and all key holders should be empowered and encouraged to exercise diligence.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No funds were lost in this case, as the vulnerability was never exploited. However, there are still some strategies which can be undertaken to reduce the risk.

In general, blockchain-level exploits can be resolved by reverting the blockchain to a prior state, which restores all funds to their prior ownership and limits potential losses to those who are transacting between the time of the exploit and the time of the revert. Effort should be undertaken by node operators to switch to a branch that eliminates the exploit as soon as possible to minimize losses. Any remaining losses would be resolved through the industry insurance fund.

Set up a multi-signature wallet with private keys held separately by delegate signatories from seven prominent platforms and services within the industry. Establish requirements for contributions by all platforms and services within the country, designed to be affordable for small platforms yet large enough to cover anticipated breach events. Any breach event can be brought forth by a member platform or a petition of 100 signatures for consideration by the delegate signatories. A vote of 4 or more delegate signatures is required to release any funds, which could partially or fully restore lost funds based on their assessment.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.