Lack of Circuit Breaker in the smart contracts

[0xM3R]

Vulnerability Details

The contract lacks a mechanism to pause operations during emergencies or detected exploits. This limits the ability to respond to incidents and mitigate damage.

Analysis

• There is no functionality to halt minting, transfers, or cross-chain operations in case of detected vulnerabilities. https://github.com/zeta-chain/standard-contracts/blob/main/contracts/nft/contracts/evm/UniversalNFT.sol

How It Can Be Harmful

• Uncontrolled Exploits: Attackers can continue exploiting vulnerabilities until the contract is manually upgraded.
• Loss of Funds: Without the ability to pause operations, damage can quickly escalate.

How to Mitigate the Issue

1. Integrate OpenZeppelin’s Pausable Contract:
   Use the Pausable library to add pause and unpause functions:

   import "@openzeppelin/contracts/security/Pausable.sol";
   
   contract UniversalNFT is Pausable {
       function transferCrossChain(...) external whenNotPaused {
           ...
       }
   
       function pause() external onlyOwner {
           _pause();
       }
   
       function unpause() external onlyOwner {
           _unpause();
       }
   }

2. Restrict Access to Pause Functions:
   Ensure only authorized accounts (e.g., owner or admin) can pause or unpause the contract.

References:

• SWC-112: Missing Emergency Stop: Highlights the risks of not having an emergency stop mechanism in smart contracts.
  • SWC Registry - SWC-112
• OpenZeppelin Pausable Contract Documentation: Provides details on implementing a circuit breaker using the Pausable modifier.
  • OpenZeppelin Pausable
• Parity Multisig Wallet Hack (2017): Demonstrates the need for circuit breakers to quickly mitigate damage during exploits.
  • Parity Wallet Hack

[0xM3R]

The same flawed logic has been implemented in the UniversalToken.sol as well. https://github.com/zeta-chain/standard-contracts/blob/a08166a1ee3874bd938d351f10b75e02bd197177/contracts/token/contracts/evm/UniversalToken.sol