wBTC Threat Modeling

OrangeLayer requires analyzing potential threats according to various aspects of threat modelling frameworks such as STRIDE, PASTA, and VAST. This exercise aims to identify, assess, and prioritize threats to ensure the robustness and security of the staking process for these assets. Several threats typical to Web2 environments do not impact Web3 systems, leading us to adopt the PASTA framework for a more tailored analysis. This approach has uncovered specific risks that must be considered regarding staking security within Web3.

Security Considerations for wBTC Staking

Smart Contract Vulnerabilities

• Threat: Exploits targeting vulnerabilities within the wBTC staking smart contracts.

• Mitigation: Conduct comprehensive smart contract audits by reputable security firms. Implement a bug bounty program to incentivize the discovery and reporting of vulnerabilities.

Cross-chain Bridge Security

• Threat: Security weaknesses in the bridges that transfer BTC to wBTC lead to asset loss.

• Mitigation: Utilize trusted, audited cross-chain bridges with multisignature wallets and threshold signature schemes for added security.

Price Manipulation and Depegging Risks

• Threat: Market manipulation leading to wBTC depegging from BTC, affecting staking value.

• Mitigation: Monitor market conditions and implement automated triggers to adjust staking parameters or pause operations in case of significant depegging.

Regulatory Compliance and Legal Risks

• Threat: Changes in the regulatory landscape affecting the legality or operation of wBTC staking.

• Mitigation: Stay abreast of regulatory changes and engage with legal counsel to ensure compliance. Implement contingency plans for regulatory shifts.