TL;DR
- Critical vulnerability in Cosmos’ IBC protocol allowed infinite tokens to be generated.
- It existed in ibc-go but was made exploitable by recent developments in the Cosmos SDK.
- Quick action by the team and collaboration with Asymmetric Research prevented loss of funds.
The recent news about Cosmos revealed a critical vulnerability in its Inter-Blockchain Communication (IBC) protocol that could have had devastating consequences for users and the ecosystem.
This vulnerability was in the ibc-go reference implementation and allowed attackers to conduct a reentrant attack during the handling of timeout messages, potentially allowing them to generate an infinite number of IBC tokens on chains connected to Cosmos.
The Inter-Blockchain Communication (IBC) protocol within the Cosmos ecosystem plays a foundational role in facilitating seamless communication between different blockchains.
It serves as a vital conduit through which various applications and protocols can engage and transact across interconnected channels.
However, the discovered vulnerability put at least $126 million in assets at risk, especially on platforms like Osmosis that use the ICS20 interchain token standard.
Exploitation of this vulnerability would have been possible thanks to recent developments in the Cosmos SDK ecosystem, specifically related to CosmWasm and IBC middleware.
By leveraging features like CosmWasm’s IBC hooks, attackers could have executed recursive calls to repeatedly trigger the ICS20 token redemption process, potentially allowing the theft of funds or unlimited generation of tokens.
Cosmos developers quick response was crucial to preventing malicious exploitation
After being privately disclosed through the Cosmos HackerOne bug bounty program, a swift and effective patch was deployed to resolve the vulnerability in question, ensuring the protection of user funds within the ecosystem.
This action highlighted the importance of having robust security programs and collaboration between security researchers and developers in the blockchain space.
This incident highlights the ongoing challenges in the security of blockchain ecosystems and underscores the need for proactive measures to identify and mitigate vulnerabilities in a constantly evolving environment.
The quick and effective response in this case has demonstrated the maturity and commitment of Cosmos and its collaborators in maintaining the integrity and security of its network and digital assets.
