CVE-2023-38701

Hydra is the layer-two scalability solution for Cardano. Users of the Hydra head protocol send the UTxOs they wish to commit into the Hydra head first to the commit validator, where they remain until they are either collected into the head validator or the protocol initialisation is aborted and the value in the committed UTxOs is returned to the users who committed them. Prior to version 0.12.0, the commit validator contains a flawed check when the ViaAbort redeemer is used, which allows any user to spend any UTxO which is at the validator arbitrarily, meaning an attacker can steal the funds that users are trying to commit into the head validator. The intended behavior is that the funds must be returned to the user which committed the funds and can only be performed by a participant of the head. The initial validator also is similarly affected as the same flawed check is performed for the ViaAbort redeemer. Due to this issue, an attacker can steal any funds that user’s try to commit into a Hydra head. Also, an attacker can prevent any Hydra head from being successfully opened. It does not allow an attacker to take funds which have been successfully collected into and currently reside in the head validator. Version 0.12.0 contains a fix for this issue.