Audit name:
[SCA] Newrails | Stablecoin | Feb2026
Date:
Mar 12, 2026
Table of Content
Introduction
We express our gratitude to the Newrails team for the collaborative engagement that enabled the execution of this Smart Contract Security Assessment.
Stablecoin is an upgradeable, role-controlled ERC-20 stablecoin with configurable decimals, per-minter mint quotas, pausing/blacklisting enforcement, EIP-2612 permit, and EIP-712 authorization-based transfer/receive/burn flows plus token/ETH rescue functions.
Document | |
|---|---|
| Name | Smart Contract Code Review and Security Analysis Report for Newrails |
| Audited By | Kornel Światłowski |
| Approved By | Seher Saylik |
| Website | www.newrails.xyz→ |
| Changelog | 23/02/2026 - Preliminary Report |
| 12/03/2026 - Final Report | |
| Platform | Monad |
| Language | Solidity |
| Tags | ERC20, Signatures, Upgradable, Permit |
| Methodology | https://docs.hacken.io/methodologies/smart-contracts→ |
Document
- Name
- Smart Contract Code Review and Security Analysis Report for Newrails
- Audited By
- Kornel Światłowski
- Approved By
- Seher Saylik
- Website
- www.newrails.xyz→
- Changelog
- 23/02/2026 - Preliminary Report
- 12/03/2026 - Final Report
- Platform
- Monad
- Language
- Solidity
- Tags
- ERC20, Signatures, Upgradable, Permit
Review Scope | |
|---|---|
| Repository | https://github.com/Newrails-xyz/NewrailsEMT-EVM→ |
| Commit | 8fbd0eb24548926cd98afb0f985d46be3eee9579 |
| Final Commit | 8fbd0eb24548926cd98afb0f985d46be3eee9579 |
Review Scope
- Commit
- 8fbd0eb24548926cd98afb0f985d46be3eee9579
- Final Commit
- 8fbd0eb24548926cd98afb0f985d46be3eee9579
Audit Summary
The system users should acknowledge all the risks summed up in the risks section of the report
Documentation quality
Functional requirements are not provided.
No roles description.
No documentation.
No Readme.md file or any other file with instructions or description.
No whitepaper.
No Tokenomics.
NatSpec is sufficient.
Technical description is limited.
NatSpec is sufficient.
No run instructions.
No technical specification.
Code quality
The development environment is configured.
NatSpec covers the code and is detailed.
Test coverage
Code coverage of the project is 57.14% (branch coverage).
Deployment and basic user interactions are thoroughly tested.
Negative case coverage is missed.
System Overview
Stablecoin - Upgradeable ERC-20 token intended to operate as a stablecoin. It uses OpenZeppelin upgradeable modules (ERC20, Permit, Pausable, AccessControl, UUPS) and adds custom features on top: configurable decimals, per-minter mint quotas controlled by a separate approver role, and multiple administrative controls (pause/unpause, blacklist management, upgrade authorization, and rescue operations). Blacklisting and pausing are enforced at the token primitive level (transfer/mint/burn updates and approvals), so restrictions apply consistently across regular ERC20 operations, transferFrom, and signature-based authorization flows. The contract also implements EIP-712 authorization-based actions (transferWithAuthorization, receiveWithAuthorization, burnFromWithAuthorization) to enable gasless-style transfers/burns with one-time nonces and validity windows.
Blacklistable - Blacklist module with dedicated storage slot, isBlacklisted() query, and notBlacklisted(address) modifier used to block blacklisted participants in token flows.
Roles - Library defining bytes32 constants for the roles used by Stablecoin.
Privileged roles
Stablecoin uses an AccessControlUpgradeable contract from OpenZeppelin to implement role-based access control. It defines the following roles with these capabilities:
ADMIN_ROLE can:
grantRole/revokeRole: manage role assignments (as role admin)
MINTER_APPROVER_ROLE can:
approveMinter: set/update a minter’s remaining mint allowance (quota)
MINTER_ROLE can:
mint: mint tokens to a recipient and decrease minter allowance
BURNER_ROLE can:
burn: burn tokens from caller balanceburnFromWithAuthorization: burn tokens from from via EIP-712 authorization
PAUSER_ROLE can:
pause: pause transfers and approvalsunpause: unpause transfers and approvals
BLACKLISTER_ROLE can:
blacklist: add an account to the blacklistunblacklist: remove an account from the blacklist
RESCUER_ROLE can:
rescueERC20: recover ERC-20 tokens held by the contractrescueETH: recover native ETH held by the contract
UPGRADER_ROLE can:
upgradeToAndCall: perform UUPS upgrade (via_authorizeUpgrade)
Potential Risks
Centralized Control of Minting Process: The token contract’s design allows for centralized control over the minting process, posing a risk of unauthorized token issuance, potentially diluting the token value and undermining trust in the project's economic governance.
Insufficient Multi-signature Controls for Critical Functions: The lack of multi-signature requirements for key operations centralizes decision-making power, increasing vulnerability to single points of failure or malicious insider actions, potentially leading to unauthorized transactions or configuration changes.
Flexibility and Risk in Contract Upgrades: The project's contracts are upgradable, allowing the administrator to update the contract logic at any time. While this provides flexibility in addressing issues and evolving the project, it also introduces risks if upgrade processes are not properly managed or secured, potentially allowing for unauthorized changes that could compromise the project's integrity and security.
Absence of Upgrade Window Constraints: The contract suite allows for immediate upgrades without a mandatory review or waiting period, increasing the risk of rapid deployment of malicious or flawed code, potentially compromising the system's integrity and user assets.
Findings
Code ― | Title | Status | Severity | |
|---|---|---|---|---|
| F-2026-1521 | Redundant receive Function | accepted | Low | |
| F-2026-1521 | Inconsistent Blacklist Enforcement Across Burn Functions | accepted | Low | |
| F-2026-1520 | Blacklist Does Not Restrict Privileged Contract Interactions | accepted | Low | |
| F-2026-1520 | Improper Allowance Update Allows Mint Of Unauthorized Excessive Token | accepted | Low | |
| F-2026-1522 | Blacklisted Addresses Can Act as Relayers in Signature-Based Transfers | accepted | Observation | |
| F-2026-1522 | Redundant Inheritance of Initializable and ERC20Upgradeable | accepted | Observation | |
| F-2026-1521 | Public Visibility Used for Functions Intended for External Calls | accepted | Observation | |
| F-2026-1521 | Missing Validation of Decimal Value During Initialization | accepted | Observation | |
| F-2026-1520 | Floating Pragma | accepted | Observation |
Appendix 1. Definitions
Severities
When auditing smart contracts, Hacken is using a risk-based approach that considers Likelihood, Impact, Exploitability and Complexity metrics to evaluate findings and score severities.
Reference on how risk scoring is done is available through the repository in our Github organization:
Severity | Description |
|---|---|
Critical | Critical vulnerabilities are usually straightforward to exploit and can lead to the loss of user funds or contract state manipulation. |
High | High vulnerabilities are usually harder to exploit, requiring specific conditions, or have a more limited scope, but can still lead to the loss of user funds or contract state manipulation. |
Medium | Medium vulnerabilities are usually limited to state manipulations and, in most cases, cannot lead to asset loss. Contradictions and requirements violations. Major deviations from best practices are also in this category. |
Low | Major deviations from best practices or major Gas inefficiency. These issues will not have a significant impact on code execution. |
Severity
- Critical
Description
- Critical vulnerabilities are usually straightforward to exploit and can lead to the loss of user funds or contract state manipulation.
Severity
- High
Description
- High vulnerabilities are usually harder to exploit, requiring specific conditions, or have a more limited scope, but can still lead to the loss of user funds or contract state manipulation.
Severity
- Medium
Description
- Medium vulnerabilities are usually limited to state manipulations and, in most cases, cannot lead to asset loss. Contradictions and requirements violations. Major deviations from best practices are also in this category.
Severity
- Low
Description
- Major deviations from best practices or major Gas inefficiency. These issues will not have a significant impact on code execution.
Potential Risks
The "Potential Risks" section identifies issues that are not direct security vulnerabilities but could still affect the project’s performance, reliability, or user trust. These risks arise from design choices, architectural decisions, or operational practices that, while not immediately exploitable, may lead to problems under certain conditions. Additionally, potential risks can impact the quality of the audit itself, as they may involve external factors or components beyond the scope of the audit, leading to incomplete assessments or oversight of key areas. This section aims to provide a broader perspective on factors that could affect the project's long-term security, functionality, and the comprehensiveness of the audit findings.
Appendix 2. Scope
The scope of the project includes the following smart contracts from the provided repository:
Scope Details | |
|---|---|
| Repository | https://github.com/Newrails-xyz/NewrailsEMT-EVM→ |
| Commit | 8fbd0eb24548926cd98afb0f985d46be3eee9579 |
| Final Commit | 8fbd0eb24548926cd98afb0f985d46be3eee9579 |
| Whitepaper | - |
| Requirements | - |
| Technical Requirements | - |
Scope Details
- Commit
- 8fbd0eb24548926cd98afb0f985d46be3eee9579
- Final Commit
- 8fbd0eb24548926cd98afb0f985d46be3eee9579
- Whitepaper
- -
- Requirements
- -
- Technical Requirements
- -
Assets in Scope
Appendix 3. Additional Valuables
Additional Recommendations
The smart contracts in the scope of this audit could benefit from the introduction of automatic emergency actions for critical activities, such as unauthorized operations like ownership changes or proxy upgrades, as well as unexpected fund manipulations, including large withdrawals or minting events. Adding such mechanisms would enable the protocol to react automatically to unusual activity, ensuring that the contract remains secure and functions as intended.
To improve functionality, these emergency actions could be designed to trigger under specific conditions, such as:
Detecting changes to ownership or critical permissions.
Monitoring large or unexpected transactions and minting events.
Pausing operations when irregularities are identified.
These enhancements would provide an added layer of security, making the contract more robust and better equipped to handle unexpected situations while maintaining smooth operations.
Frameworks and Methodologies
This security assessment was conducted in alignment with recognised penetration testing standards, methodologies and guidelines, including the NIST SP 800-115 – Technical Guide to Information Security Testing and Assessment →, and the Penetration Testing Execution Standard (PTES) →, These assets provide a structured foundation for planning, executing, and documenting technical evaluations such as vulnerability assessments, exploitation activities, and security code reviews. Hacken’s internal penetration testing methodology extends these principles to Web2 and Web3 environments to ensure consistency, repeatability, and verifiable outcomes.