Payy is an Ethereum L2 zk-rollup for privacy preserving and regulatory compliant transactions

Overview

Payy is an Ethereum L2 zk-rollup for privacy preserving and regulatory compliant transactions. Prior to version 1.3.0, agg_agg forwards the compacted message stream from its inner proofs into a public messages: [Field; 1000] array, but it never checks that the unused tail of the outer array is zero. A registered prover can build a valid agg_final proof for an approved rollup block while inserting an extra burn message after the real messages. RollupV1.verifyRollup() then parses that public input as a normal burn and transfers USDC from the rollup contract to the attacker. This is a severe circuit soundness failure: the proof system accepts a public statement whose messages array is not fully derived from the verified inner proofs. On the current deployment, verifyRollup() is restricted to the existing allowlisted prover, so a fresh public caller cannot submit the invalid proof directly. That gate limits who can reach L1 today; it does not make the circuit statement sound. The issue becomes permissionless under the prover model described in the Payy whitepaper. Section 3.3.2 states: "To join as a prover, the prover is required to submit a small stake", and Section 3.3.1 states that if a prover fails to submit, "other nodes can submit the block proof instead." In that model, an attacker only needs to become a registered prover and use public validator approval data for an already approved block. This issue has been patched in version 1.3.0.

Remediation

Refer to the linked advisories for vendor-supplied fixes and affected version ranges.