Arkad Protocol Security Audit: Codebase Hardening Targets Input Validation & Bitcoin Script Vulnerabilities

The Arkad protocol (arkd-rs) has undergone a comprehensive security audit and hardening effort, focusing on critical vulnerabilities in input validation and Bitcoin script handling. The changes aim to eliminate panic conditions and enforce strict bounds on all external inputs, directly addressing risks of out-of-memory (OOM) attacks, integer overflows, and invalid transaction constructions that could compromise protocol integrity.

Key hardening measures include the centralization of validation logic for core parameters like amounts, public keys, transaction IDs, and VTXO counts. In the Bitcoin script module, specific checks now reject zero or excessive CheckLockTimeVerify (CLTV) timelocks, invalid CheckSequenceVerify (CSV) flags, and scripts with identical user and ASP (Authorized Service Provider) public keys—a condition that could break the protocol's security model. Crucially, error handling has been overhauled: functions like `psbt::from_transaction()` and `Database::sqlite_pool()` now return explicit `Result` types instead of panicking, and all reachable `.unwrap()` or `.expect()` calls on external inputs have been removed.

The audit's scope extends to the gRPC API layer, with validation now enforced for endpoints like `register_for_round`. This systematic removal of panic vectors and enforcement of strict computational bounds significantly reduces the attack surface for both malicious actors and accidental misuse, hardening the protocol's core against a range of denial-of-service and logical exploit scenarios.