#37718 [BC-High] Key rotations bricks the system due to incorrect `aggregate_key` being used to spend the `peg UTXO` when signing a sweep transaction

Submitted on Dec 13th 2024 at 08:31:21 UTC by @n4nika for Attackathon | Stacks

• Report ID: #37718

• Report Type: Blockchain/DLT

• Report severity: High

• Target: https://github.com/stacks-network/sbtc/tree/immunefi_attackaton_0.9/signer

• Impacts:

  • Network not being able to confirm new transactions (total network shutdown)

Description

Summary

When the coordinator gets the signatures to spend the previous peg-UTXO, they need to pass the aggregate_key which matches the key of that UTXO's key-only spendable taproot output. Currently this is not the case if we rotated the keys in the current signing round. This causes the coordinator to get a signature for the sweep transaction which cannot actually spend it. Since there is no programmed fallback to fix this, this will completely shutdown the system.

Finding Description

In the coordinator we have the following flow:

1. get requests from emily

2. deploy smart contracts if needed

3. handle key rotation

4. get pre-signature (just pre-validation)

5. handle sweep transactions

6. handle sBTC deposit transactions (s-deposit) (these mint sBTC)

   1. get signatures from signers

   2. submit the TX to Stacks

If we look at the code, we see that the newly gotten aggregate_key is used if we just rotated the keys:

let aggregate_key = match maybe_aggregate_key {
    Some(key) => key,
    // This function returns the new DKG aggregate key.
    None => {
        let dkg_result = self.coordinate_dkg(&bitcoin_chain_tip).await?;
        self.get_signer_set_and_aggregate_key(&bitcoin_chain_tip)
            .await
            .ok()
            .and_then(|res| res.0)
            .unwrap_or(dkg_result)
    }
};

self.deploy_smart_contracts(&bitcoin_chain_tip, &aggregate_key)
    .await?;

self.check_and_submit_rotate_key_transaction(&bitcoin_chain_tip, &aggregate_key)
    .await?;

self.construct_and_sign_bitcoin_sbtc_transactions(
    &bitcoin_chain_tip,
    &aggregate_key, // [1] <-----
    &signer_public_keys,
)
.await?;

At [1], we pass it to the function handling the sweep transactions (which includes handling of the peg UTXO).

That function then calls sign_and_broadcast which then coordinates signing rounds in order to spend the peg UTXO and all user deposits. What is important here, is the signing of the peg UTXO:

let mut coordinator_state_machine = CoordinatorStateMachine::load(
    &mut self.context.get_storage_mut(),
    *aggregate_key, // [2] <-----
    signer_public_keys.clone(),
    self.threshold,
    self.private_key,
)
.await?;
// [...]
let signature = self
    .coordinate_signing_round(
        bitcoin_chain_tip,
        &mut coordinator_state_machine, // [3] <-----
        txid,
        &msg,
        SignatureType::Taproot(None),
    )
    .await;

At [2] we create the state machine used for signing with the aggregate_key and request signatures using that state machine at [3].

Scenario

This becomes an issue if we rotate the keys:

• we have an aggregate_key (keyA) which we use to sign peg UTXOs. This means all our newly generated UTXOs can only be spent with keyA!

• we now rotate our keys, generating a new key (keyB)

• since we use keyB in sign_and_broadcast now, the resulting signature will NOT be able to spend the previous UTXO since it is only spendable with keyA!

Impact

This will cause a full system halt since we cannot execute new sweep transactions and our previous peg UTXO is locked until we execute a signer upgrade.

Mitigation

In order to fix this, I would recommend getting the needed aggregate_key from the previous peg UTXO itself. This should work since signers are still able to sign for old aggregate_keys even after a rotation (according to the team).

Proof of Concept

Note to immunefi

This issue was discussed in discord and I was asked by @djordon to submit it explicitly without the requirement to write a PoC