Blockchain Security Audit for a Decentralized Application

Project background 

Overview

Our client, a blockchain-based application provider, sought to identify and eliminate potential security vulnerabilities within their front-end client. While the application was designed to use decentralized storage and cryptographic security, concerns arose regarding the potential reduction of blockchain functionality to centralized data handling, leading to security risks such as data leaks, private key exposure, and vulnerabilities to common cyberattacks. The goal was to conduct a deep security audit and make sure that the blockchain mechanisms were properly implemented without introducing centralized weak points.

Project Goals

• Verify that distributed blockchain storage was implemented correctly and not replaced with centralized alternatives.
• Identify potential data leaks within the application’s local storage or other non-secure storage mechanisms.
• Assess reverse engineering risks and make sure that the application’s code does not expose critical data.
• Evaluate the security of cryptographic key storage and the handling of private keys.
• Conduct penetration testing for vulnerabilities such as Man-in-the-Middle (MitM) attacks, SQL injection, brute-force authentication attempts, and unauthorized access.
• Confirm compliance with blockchain security best practices, including SSL pinning, secure API routing, and emulator detection to prevent fraud and unauthorized access.

Challenges

• Detecting unintended data exposure through local storage, which could allow attackers to extract sensitive user information.
• Assessing code obfuscation and reverse engineering resistance, especially in mobile environments where attackers can extract source code.
• Verifying cryptographic key management policies, so that keys were never stored in plaintext or retrievable through debugging.
• Simulating real-world attack scenarios such as brute-force attempts, emulator-based bypassing, and MitM attacks to identify security flaws.

Our approach

Solution

For a comprehensive security review, we conducted both static and dynamic analysis of the front-end application. Our team performed a deep code review, assessing whether blockchain-based storage was properly utilized or if sensitive data was being stored insecurely on local devices. We tested reverse engineering resistance, attempting to decompile the application and analyze its source code for hardcoded secrets, exposed private keys, and debugging artifacts.

For network security, we implemented penetration testing to check for MitM vulnerabilities, ensuring that SSL pinning mechanisms were properly configured to prevent traffic interception. Additionally, we evaluated authentication security, testing for brute-force resistance, rate limiting, and multi-factor authentication enforcement. To protect against privilege escalation attacks, we assessed whether the app could detect rooted or jailbroken devices and effectively restrict access.

Given that blockchain-based applications require strict data integrity, we verified that transaction signing and key storage mechanisms adhered to industry standards. We checked whether private keys were securely stored within secure enclaves or hardware security modules (HSMs) rather than being exposed in local storage or memory.

Team

The audit was conducted by three security analysts specializing in blockchain security, application penetration testing, and cryptographic analysis. Their expertise in decentralized application security ensured that both blockchain-specific risks and traditional application vulnerabilities were effectively addressed.

Results

The security audit confirmed that the blockchain storage mechanism was correctly implemented, ensuring that no critical user data was stored outside decentralized infrastructure in a way that could compromise security. During the analysis, vulnerabilities related to the local storage of sensitive user information were identified and mitigated, eliminating potential risks of unauthorized data access.

The application was strengthened against reverse engineering through improved code obfuscation techniques, making it significantly harder for attackers to extract sensitive logic or credentials from the source code. Authentication and API security were enhanced by enforcing strict rate limits on login attempts and securing API endpoints to prevent unauthorized access.

Further testing validated that the application successfully implemented resistance against Man-in-the-Middle (MitM) attacks, with SSL pinning and encrypted communication channels effectively preventing traffic interception. The emulator detection mechanism was also confirmed to be functioning correctly, ensuring that the app could identify and block execution in virtualized environments, reducing the risk of privilege escalation and unauthorized tampering.