slides "software supply chain security of web3"

gistfile1.txt

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author: Martin Monperrus
date: "KTH & mab.xyz"
paging: "%d/%d"
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# Software Supply Chain Security of Web3

## **Martin Monperrus**  
### Professor, IEEE Fellow
### KTH Royal Institute of Technology & mab.xyz

*Acknowledgments: Raphina Liu, Monica Jin, Javier Ron, Sofia Bobadilla, Benoit Baudry, and the CHAINS team*

*Supported by: Knut and Alice Wallenberg Foundation, Swedish Foundation for Strategic Research, Ethereum Foundation*


---
# Welcome to Web3
## The Stakes Are Different

- **Web2**: Vulnerabilities → data breaches, service disruptions
- **Web3**: Vulnerabilities → **irreversible financial losses**

### Notable Incidents
- **$1.5B** Bybit exchange attack (Fev 2025)
- **$120M** Balancer (Nov 2025)

*When blockchain is your backend, there's no "undo" button*

---
# Anatomy of a $1.5B Supply Chain Attack

1. Compromised dev machine via spear phishing
1. Compromised AWS bucket
1. Compromised fronted for Gnosis Safe wallet interface
1. Users presented with legitimate-looking transaction approval
1. Wallet (multi)signed what appeared to be routine operation
1. **Actual transaction**: Transfer $1.5B to attacker address

### Notes
- ✓ No smart contract vulnerability
- ✓ Passed all traditional security checks
- ✓ Trust extends through entire dependency tree

---
## The Web3 Architecture Stack

- Infra: Blockchain nodes & RPC endpoints
- Backend: smart contract (Solidity)
- Frontend: web applications (Javascript)
- Wallet software (Javascript)

Plus
- Development tools & CI/CD
- Hosting infrastructure

---
## What Makes Web3 Unique?
### 🔒 Immutability
- Code can't be compromised
- Also apply to frontend (IPFS)
- Deployed contracts can't be patched
- No hotfixes in minutes

### 🔍 Transparency
- All code is public 
- All exploits are public 
- Attackers can study & simulate before exploiting
- Security through obscurity is harder

---
## What Makes Web3 Unique? (2)
### ⚡ Finality
- Transactions cannot be reversed (censorship resistance)
- No customer support rollbacks
- Direct theft in seconds

### 👤 Pseudonymity
- Attribution can be difficult
- Very strong privacy stack (mixing services)


---

## Threat Model: Who's Attacking? Jian Tan

- **Nation-state actors**: Funding covert operations through Web3 exploits
- **Organized cybercriminal groups**: Direct monetization through DeFi
- **Smartest individual attackers**: Discovering and exploiting vulnerabilities

*The tight attack-to-monetization loop creates unprecedented incentives*

### The most adversarial also makes it the most robust software architecture ever 

---
## Attack Vector #1: Blockchain Nodes

### Attack a distributed system through its dependencies

### Node Software Dependencies
- Ethereum, Solana validators depend on hundreds of libraries
- Compromise through account takeover, typosquatting, or build system attacks
- Can manipulate consensus, relay, or state queries

*Decentralized deployment != solo stakers != software diversity*

See "The Multibillion Dollar Software Supply Chain of Ethereum "
---
## Attack Vector #2: Smart Contract Dependencies

### Pre-Deployment Library Attack
- Malicious npm packages (e.g., compromised OpenZeppelin):
- Inject vulnerabilities & backdoor during compilation
- **Result**: Permanent vulnerabilities in immutable contracts

### On-Chain Library Attack
Upgradeable libraries affecting all dependent contracts:
- Many-to-one trust relationship
- Single malicious upgrade = widespread compromise
- *Example*: Parity Multisig hack ($150M frozen)

See "On-Chain Analysis of Smart Contract Dependency Risks on Ethereum"

---
## Attack Vector #3: Frontend Dependencies

### The JavaScript Supply Chain
- React/Vue.js + hundreds of npm packages
- Blockchain libraries: ethers.js, web3.js, viem
- Deep transitive dependency trees

### Transaction Manipulation Attack
- Change recipient addresses silently 
- Increase approval amounts to maximum
- Substitute benign calls with malicious ones
- **Users sign what appears legitimate in their wallet**

*Bybit 2025: Compromised Safe dApp dependency stole $1.5B*

---
## Attack Vector #4: Wallet Software
- Manage private cryptographic keys & signing operations
- Thousands of dependencies in their stack
- Cryptographic libraries, UI frameworks, blockchain clients

### Wallet Dependency Attack
- Exfiltrate keys and seed phrases
- Modify transactions before signing
- Tamper with approval dialogs

*Ledger Connect Kit 2023: Injected code prompted fund-draining transactions*

See "Dirty-waters: Investigation of the software supply chain of
javascript cryptocurrency wallet"
---
## Attack Vector #5: Frontend Delivery
### Domain Hijacking (DNS Attack)
- BGP hijacking or DNS provider compromise
- Pixel-perfect interfaces, correct URL
- Users connect wallets to attacker infrastructure

### Hosting Provider Compromise
- Modify deployed artifacts directly
- Bypasses source code and build pipeline
- Inject JavaScript into production files

### Interplanetary File System (IPFS)
- <https://ipfs.io/ipfs/QmSqE4mXHA2BXW58deDbXE8MTcsL5JSKNDbm23sVQxRLPS>

*BadgerDAO 2021: Cloudflare API credentials compromised → $120M loss*

---
## Attack Vector #6: Development Tools
### Compiler Attack
- Solidity compiler with backdoors
- Deployed bytecode differs from source
- Nearly impossible to detect through audits

### IDE Extension Attack
- Access to .env files & deployment private keys & API Keys
- Clipboard memory theft

See "Diverse Double-Compiling to Harden Cryptocurrency Software"

---
## Attack Vector #6: Development Tools (2)
### Framework Attack
- Hardhat, Truffle, Foundry
- Control entire development lifecycle
- Single point of failure for thousands of projects

### Build Pipeline Attack
- CI/CD compromise
- Manipulate dependency resolution
- Target smart contract continuous deployments

*SolarWinds Orion CI to break into US government organizations*
---
## Attack Vector #7: AI-Assisted Coding
### "Vibe Coding" Supply Chain Attack
- GitHub Copilot, ChatGPT trained on poisoned repositories
- AI suggests vulnerable patterns learned from backdoored code
- Flawed access controls, integer overflows, Insecure wallet integration patterns

*Real incident (2024) User lost $$$$ deploying AI-generated Solana bot code with backdoor from poisoned Github repos targeting ChatGPT training data*

---
## Other Software Supply Chain Attack Vectors

### Off-Chain Voting Platforms
- DAOs using Snapshot for governance
- Compromised governance platform can present malicious proposals as legitimate
- Falsified voting results → unauthorized on-chain execution

### Oracle Software
- Bridges off-chain data to blockchain
- Manipulated price feeds → mass liquidations
- Falsified data propagates on-chain
- Oracles verify integrity, not accuracy

---
# Mitigations
# Mitigations
# Mitigations
# Mitigations
# Mitigations
# Mitigations

---
## Mitigation Strategy: Dev

### Pre-Deployment Controls
- **Dependency verification**: Checksums, signatures, lockfiles
- **Reproducible builds**: Source code → deterministic binaries
- **Smart contract verification**: Public source alongside bytecode

*Verifier Alliance is a community effort in Web3 to foster smart contract verification*
---
## Mitigation Strategy: KUTE

- Know your dependencies (software bill of materials, aka SBOM)
- Update your dependencies (Dependabot, Renovate)
- Track your dependency changes (VEX)
- Ensure integrity at runtime

---
## ERC-7936: Versioned Proxy Interface

### The Upgrade Problem
- Users are forced to switch to the new version

```solidity
contract.call("vote") // → V1
// if contract upgrades, all clients are forced
contract.call("vote") // → V2
```
- benign upgrade: breaking changes
- malicious upgrade: theft

---
## ERC-7936: Versioned Proxy Interface
- Contracts declare which versions they support
- Consumers specify version to call
- No breaking changes
- **Supply chain defense**: Limits blast radius of compromised libraries

```solidity
contract.call("v1", "vote") // → V1
// clients decide when to bump
contract.call("v1", "vote") // → V1
```

*Apply the best of Web2 dependency management to Web3*

---
## Mitigation Strategy: CI/CD

### Build Security
- **Sandboxed containers**: Isolated, ephemeral build environments
- **Secret management**: Minimal exposure, runtime injection only, short lived
- **Multi-signature deployment**: Distributed authority, no single point of compromise

*Large attack surface between source code and deployed systems*

---
## Mitigation Strategy: Process & Policy

### Security Audits
**Smart contract audits** must include:
- Entire Solidity dependency chain review
- External onchain call validation (esp with delegatecall)
- Maintainer history analysis

**Frontend audits** should examine:
- Transaction construction logic
- Wallet integration code
- Deployment integrity verification

---
## Mitigation Strategy: Continuous Monitoring

### Post-Deployment Surveillance

**Frontend monitoring**:
- Dependency vulnerability scanning (Dependabot, Renovate)
- Deployment change tracking
- Production integrity checks

**On-chain monitoring**:
- Anomalous transaction detection (Tenderly, Forta)
- Unexpected state changes
- Library upgrade alerts
- High-privilege contract monitoring

*Sustainable pricing of monitoring not found yet*

---
## Transaction Simulation: The Final Web3 Defense

### Wallet-Level Protection
Modern wallets simulate transactions before signing:
- Execute against current blockchain state
- Display net effect in human-readable terms
- "You will send 100 USDC and receive 0.05 WETH"

### But
- Immature support
- Does not guarantee finality
- Simulation itself can be faked

*Simulation reveals what raw transaction data obscures*
---
## Call to Action
### For Developers
- Verify all dependencies with cryptographic integrity
- Use reproducible builds and multi-sig deployments
- Implement comprehensive frontend + smart contract audits

### For the Ecosystem
- Adopt security standards (ERC-7936, etc.)
- Build monitoring infrastructure
- Educate on supply chain awareness

### For Research
- Novel detection techniques for Web3-specific attacks & defenses
- Engage with the practitionner community
- Best engineering for decentralization & censorship resistance
---
## Key Takeaways

1. **Web3 attack surface: traditional + novel threats** with amplified consequences
2. **Every layer is adversarial**: nodes, contracts, frontend, wallets, tools, hosting
3. **Immutability is our best ally** – but no second chances
4. **Defense-in-depth is essential**: technical controls + process + monitoring
5. **Transparency is a double-edged sword**: public code aids both defenders and attackers

*Web3 is the highest integrity software stack ever, for the most precious workflows of our digitalized societies*

Martin Monperrus,
December 2025