EXTENDED DOCUMENTATION

Security Audit Notes

Date: 2026-03-10

Executive Summary

The current system is materially stronger than earlier iterations and is operating successfully on testnet. The worker, relayer, and contracts passed the current test suite and real end-to-end chain validation.

However, one protocol-level finding remains open and should be treated as the primary unresolved security issue before claiming a fully hardened production posture.

Scope

Neo N3 contracts
Neo X contracts
Phala worker privacy Oracle and compute execution paths
Relayer callback fulfillment path
Web admin/control-plane surfaces

Open Findings

High: fulfillment signatures do not bind full callback context

Status: open

Affected files:

text

contracts/MorpheusOracle/MorpheusOracle.cs

text

contracts/neox/contracts/MorpheusOracleX.sol

text
```
workers/morpheus-relayer/src/relayer.js
```

Current behavior:

the relayer asks the worker to sign only the callback
text
```
result
```
both contracts verify only that signature over
text
```
result
```
text
```
requestId
```
,
text
```
requestType
```
,
text
```
success
```
, and
text
```
error
```
are not covered by the worker signature

Impact:

if the updater/relayer key is compromised, an attacker can finalize pending requests with a mismatched success/error context while still presenting a valid worker signature over some result bytes
this weakens non-repudiation of the full callback envelope

Required fix:

change the worker, relayer, and both contracts to verify a canonical fulfillment envelope that binds:
- text
```
requestId
```
- text
```
requestType
```
- text
```
success
```
- text
```
result
```
- text
```
error
```

This requires a coordinated contract upgrade on both chains.

Findings addressed

1. Neo X request and key size guards were weaker than Neo N3

Fixed in

text

contracts/neox/contracts/MorpheusOracleX.sol

text
```
requestType
```
length capped at
text
```
64
```
text
```
callbackMethod
```
length capped at
text
```
64
```
text
```
payload
```
size capped at
text
```
4096
```
Oracle encryption
text
```
algorithm
```
capped at
text
```
64
```
Oracle encryption
text
```
publicKey
```
capped at
text
```
2048
```

2. Callback consumer parity gaps

Fixed parity between N3 and Neo X:

N3 callback consumer now emits admin/oracle change events
Neo X callback consumer now exposes
text
```
getCallback(uint256)
```

3. DataFeed not-found behavior differed across chains

Fixed in

text

contracts/neox/contracts/MorpheusDataFeedX.sol

text
```
getLatest(pair)
```
now returns a default record with the queried
text
```
pair
```
instead of an empty string pair

4. DataFeed source-set and attestation constraints were looser on N3

Fixed in

text

contracts/MorpheusDataFeed/MorpheusDataFeed.cs

text
```
sourceSetId >= 0
```
text
```
attestationHash.length <= 32
```

5. Privacy Oracle and compute script execution could hang indefinitely

Fixed in worker runtime:

Oracle programmable scripts now run in a separate worker thread
Compute scripts now run in a separate worker thread
text
```
vm
```
timeout interrupts synchronous infinite loops
worker termination timeout handles non-terminating async execution

configurable with:

text
```
ORACLE_SCRIPT_TIMEOUT_MS
```
text
```
COMPUTE_SCRIPT_TIMEOUT_MS
```

6. Upstream Oracle fetches could hang indefinitely

Fixed in worker runtime:

all provider fetches support timeout/abort
direct Oracle HTTP fetches support timeout/abort
configurable with:
- text
```
ORACLE_TIMEOUT
```

7. Compute entry-point name allowed identifier injection risk

Fixed in

text

workers/phala-worker/src/compute/index.js

text
```
entry_point
```
must match a valid JS identifier

8. Browser admin keys were persisted too broadly

Fixed in frontend admin panels:

provider-config admin key now uses
text
```
sessionStorage
```
, not
text
```
localStorage
```
relayer-ops admin key now uses
text
```
sessionStorage
```
, not
text
```
localStorage
```
browser restart no longer silently retains privileged admin keys

9. One admin key previously covered too many backend capabilities

Fixed in web API auth routing:

provider config routes now prefer
text
```
MORPHEUS_PROVIDER_CONFIG_API_KEY
```
relayer operation routes now prefer
text
```
MORPHEUS_RELAYER_ADMIN_API_KEY
```
signing routes now prefer
text
```
MORPHEUS_SIGNING_ADMIN_API_KEY
```
relay transaction routes now prefer
text
```
MORPHEUS_RELAY_ADMIN_API_KEY
```
text
```
MORPHEUS_OPERATOR_API_KEY
```
and legacy
text
```
ADMIN_CONSOLE_API_KEY
```
remain optional fallback keys for compatibility

10. API operations were not comprehensively persisted, and encrypted request fields were not guaranteed to be stored as ciphertext

Fixed in web/API layer:

added
text
```
morpheus_operation_logs
```
for API operation auditing
added route-level and proxy-level logging for Oracle, Compute, Feed, Runtime, Attestation, Provider Config, Relayer, Signing, and Relay routes
encrypted request fields are now extracted and stored in
text
```
morpheus_encrypted_secrets
```
as ciphertext without decryption
plaintext secret-like keys are redacted before operation-log persistence

Phala tappd / attestation progress

The worker now includes first-stage and second-stage Phala dstack/tappd integration:

public
text
```
GET /info
```
public
text
```
GET /attestation
```
authenticated
text
```
GET /keys/derived
```
optional response-side quote attachment when
text
```
PHALA_EMIT_ATTESTATION=true
```
derived Neo N3 signing fallback when
text
```
PHALA_USE_DERIVED_KEYS=true
```
stable Oracle X25519 transport key using dstack-derived wrapping key + sealed keystore
verifier API and
text
```
/verifier
```
demo flow for application-level attestation checks

Remaining architectural notes

N3 contracts still expose an explicit admin-only
text
```
Update(...)
```
, while the Neo X contracts are currently non-upgradeable plain contracts. This is a lifecycle difference, not an immediate exploitable vulnerability.
Relayer-side transaction signing now supports dstack-derived key fallback for N3 and Neo X fulfill transactions, but explicit env keys are still supported as operational overrides.
The locally ignored file
text
```
deploy/phala/morpheus.env
```
currently contains live operational secrets and private keys. It is ignored by git, but it still represents a workstation secret concentration risk and should be handled as sensitive operator material.

Validation

text

npm --prefix workers/phala-worker run check

text
```
npm --prefix workers/phala-worker test
```
text
```
npm --prefix contracts/neox test
```

text

dotnet test contracts/__tests__/NeoContracts.Tests.csproj

text

node examples/scripts/test-neox-examples.mjs

text

node examples/scripts/test-n3-examples.mjs

live Phala health and public-key endpoint verification

live Supabase write verification for

text

morpheus_operation_logs

and

text

morpheus_encrypted_secrets

Previous Async Privacy Spec

REVISION 1.0.2LAST UPDATED: 2026-03-11

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