Tendermint Says Last Month's Cosmos Vulnerability Exposed Security Loophole

The developers behind the Cosmos network released today a full disclosure of last month's "critical security vulnerability" which reportedly enabled hackers to bypass certain penalties for misbehavior on the network.

Zaki Manian, director at Tendermint Inc – the for-profit entity behind the core technology of the Cosmos network – detailed to Coindesk in an interview:

"The key is we want to make it really difficult to misbehave in the network and then un-stake your tokens immediately and escape the consequences of that misbehavior...like voting for something bad in governance [or] the more complex things are double signage against an exchange to potentially reverse state."

Normally, Cosmos validators – which are the equivalent to miners on a proof-of-work blockchain network – that do misbehave either by voting haphazardly or signing off on false transactions are penalized by having their staked ATOM tokens slashed. This is made possible through a minimum wait period of 21 days that prevent validators from un-staking their ATOM tokens before the network is able to sufficiently detect and screen their actions.

As stated in today's post by the Tendermint team, the code vulnerability discovered last month could enable a validator to bypass the full un-staking or "un-bonding" period "and have their funds immediately become liquid essentially insta-unbonding."

"Within the first 24 hours of receiving the bug report, our tooling detected ~22 events total," the team wrote.

Having gone live this past March, Cosmos is a relatively new blockchain network that is designed to improve the interoperability between differing blockchain platforms. A reported $16 million was raised in an initial coin offering back in 2017.

The security vulnerability disclosed today was actually found in "the staking module" of the Cosmos Software Development Kit (SDK) which debuted back in 2018 as a "state-of-the-art" blockchain toolkit. It was detailed at the time as "another way to build blockchains, safely and easily" in a prior blog post.

Lessons learnt

Jessy Irwin, Tendermint's head of security, said in interview with CoinDesk that while the vulnerability disclosed today is the first of its kind to impact the Cosmos main network, "it's not the first bug that has been reported to us."

"We've gone through seven security audits and we've had multiple issues raised and then we've also had a pretty active bug bounty program," said Irwin. "We've invested quite a bit in the past year and a half since I joined the team in creating an environment where people report bugs instead of do nothing about them."

The vulnerability, now fully patched on the Cosmos network, did require Cosmos validators to execute an emergency hard fork or system-wide upgrade. The update was activated on May 31 at block number 482,100.

Irwin highlighted that in order for this hard fork to execute successfully without resulting in a network split, urgent notice need to be pushed to all Cosmos validators and other service providers who were running Cosmos software on their computers.

Moving forward, Irwin told CoinDesk that one of the biggest lessons learnt from the security disclosure and upgrade process was a greater need for secure communication channels with Cosmos validators and other service providers.

Irwin emphasized:

"We're really going to be advocating for our hub of validators and exchanges to open up their own channels for security communications ... We are working really hard with our validator set to open that up so that next time we're not running around and scrambling for information to get in touch with them."

Zaki Manian image courtesy of Web3 Foundation