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Audit name:

[SCA] Tokenizer | Token | Nov2025

Date:

Dec 2, 2025

Table of Content

Introduction
Audit Summary
System Overview
Potential Risks
Findings
Appendix 1. Definitions
Appendix 2. Scope
Appendix 3. Additional Valuables
Disclaimer

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Introduction

We express our gratitude to the Tokenizer.Estate team for the collaborative engagement that enabled the execution of this Smart Contract Security Assessment.

Tokenizer aims to be used in different jurisdictions for real estate tokenization.

Document

NameSmart Contract Code Review and Security Analysis Report for Tokenizer.Estate
Audited ByTurgay Arda Usman, David Camps
Approved ByAtaberk Yavuzer
Websitehttps://tokenizer.estate/
Changelog02/12/2025 - Preliminary Report
PlatformEthereum
LanguageSolidity
TagsERC20
Methodologyhttps://docs.hacken.io/methodologies/smart-contracts

Review Scope

Repositoryhttps://github.com/switchcase-devs/tokenizer-contract
Initial Commita35daad
Final Commit8593776

Audit Summary

8Total Findings
7Resolved
0Accepted
1Mitigated

The system users should acknowledge all the risks summed up in the risks section of the report

Documentation quality

  • Functional requirements are partially provided.

    • System requirements is missing.

    • Business logic is missing.

    • USe cases are missing.

  • Technical description is  provided.

Code quality

  • The code mostly follows best practices and style guides:

    • See informational findings for more details.

  • The development environment is configured.

Test coverage

Code coverage of the project is 100% (branch coverage).

  • Deployment and basic user interactions are covered with tests.

  • Negative cases coverage is provided.

  • Interactions by several users are  tested thoroughly.

System Overview

Tokenizer aims to be used in different jurisdictions for real estate tokenization.

RealEstateToken  — an upgradeable ERC-20 token with pausing, burning, voting, and permit functionalities.

Privileged roles

  • ROLE_ADMIN: Enable or disable whitelist mode. Has full authority to grant or revoke any role, including itself, and oversees the hierarchy and administration of all privileged roles within the system.

  • ROLE_WHITELIST: Add or remove accounts from the whitelist.

  • ROLE_TRANSFER_RESTRICT: Freeze accounts and lock balances.

  • ROLE_TRANSFER: Force transfers of tokens from any account.

  • ROLE_MINTER: Mint new tokens to any account.

  • ROLE_BURNER: Burn tokens from any account.

  • ROLE_PAUSER: Pause all state-changing operations (transfers, mints, burns).

Potential Risks

The project concentrates minting tokens in a single address, raising the risk of fund mismanagement or theft, especially if key storage security is compromised.

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.

The absence of restrictions on state variable modifications by the owner leads to arbitrary changes, affecting contract integrity and user trust, especially during critical operations like minting phases.

The broad authorization model increases the risk of protocol control loss if any authorized address is compromised, potentially leading to unauthorized actions and significant financial loss.

The digital contract architecture relies on administrative keys for critical operations. Centralized control over these keys presents a significant security risk, as compromise or misuse can lead to unauthorized actions or loss of funds.

The token ecosystem grants a single entity the authority to implement upgrades or changes. This centralization of power risks unilateral decisions that may not align with the community or stakeholders' interests, undermining trust and security.

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.

The RealEstateToken is implemented as an ERC20 token with 0 decimals, which is non-standard and can introduce significant precision loss or truncation when performing arithmetic operations involving token amounts, since all values are forced to whole units with no fractional representation.

The system enforces a strict whitelisting mechanism that blocks token transfers whenever either the sender or the recipient is not whitelisted, meaning that any account holding the ROLE_WHITELIST permission can indirectly freeze a user’s funds by removing them from the whitelist via setWhitelist(). Because token transfers depend entirely on this whitelist status, users can lose the ability to move or access their tokens at any time, effectively granting the whitelisting authority full control over asset mobility.

The system includes a transfer restriction mechanism where the account assigned the ROLE_TRANSFER_RESTRICT role can call setFrozen() to freeze user accounts, preventing them from both sending and receiving tokens. Because frozen status fully disables token mobility, holders of this role effectively gain unilateral control over users’ ability to access or move their assets. This introduces a significant centralization and censorship risk, as accounts can be frozen at will, potentially leading to asset immobility, loss of user autonomy, and reduced trust in the system’s fairness and security guarantees.

The presence of the forceTransfer() function allows the ROLE_TRANSFER system role to arbitrarily move tokens from one user to another without requiring prior approval or allowance, effectively bypassing standard ERC20 ownership protections. Since this operation forcibly transfers tokens from users who may not consent or even be aware of the action, the role holder gains sweeping control over all token balances in the system. This creates a critical centralization and asset-custody risk, as privileged operators can seize, reallocate, or manipulate user funds at will, undermining user trust, violating typical ERC20 security assumptions, and potentially exposing the system to abuse or governance failures.

The burnFrom() function allows an account with the ROLE_BURNER to destroy tokens from arbitrary user accounts without requiring allowance or user consent, granting this role unilateral authority to reduce user balances at will. This deviates from standard ERC20 burn mechanics, where burnFrom() typically requires prior approval, and introduces a critical centralization and asset-custody risk, as privileged operators can permanently remove user funds without restriction or accountability. Such unrestricted burning capabilities undermine user trust, violate common ERC20 assumptions, and create significant potential for abuse or mismanagement.

The lockBalance() function allows an account with the ROLE_TRANSFER_RESTRICT to arbitrarily lock portions of a user’s balance, reducing the amount they are able to transfer. Because this mechanism does not require user consent and can be invoked at any time, the role holder can progressively restrict or fully immobilize a user’s tokens by locking all unlocked funds. This introduces a significant centralization and censorship risk, as privileged operators can effectively limit or prevent users from accessing or moving their assets, undermining autonomy and potentially enabling abusive or unfair control over token balances.

The contract includes a pause mechanism that allows the ROLE_PAUSER role to halt all state-changing operations, including transfers, mints, and burns. While pausing can be useful for emergency response, it also centralizes significant control in the hands of the designated role holder, who can unilaterally suspend the system’s core functionality at any time. This introduces a high operational and availability risk, as an accidental activation, misuse, or compromise of the ROLE_PAUSER account would effectively freeze the entire token ecosystem, disrupt user activity, and prevent normal operation until the system is unpaused.

The system assigns extensive authority to several highly privileged roles—including ROLE_ADMIN, ROLE_TRANSFER, ROLE_MINTER, ROLE_BURNER, ROLE_PAUSER, ROLE_WHITELIST, and ROLE_TRANSFER_RESTRICT—each capable of executing critical operations such as forcing transfers, burning tokens, freezing accounts, locking balances, managing whitelists, and pausing the system. As the token implements ERC20VotesUpgradeable, these roles also indirectly influence governance voting power, meaning mismanagement can affect not only token balances but also governance outcomes. Because the platform is intended to be operated by external organizations, the security, integrity, and fairness of the system rely on their ability to administer these roles responsibly and safeguard the associated private keys. Any misconfiguration, misuse, or compromise of these privileged roles would grant operators unrestricted control over user assets, system functionality, and governance voting, presenting a severe governance and custodial risk with the potential to cause irreversible asset loss, systemic disruption, or unauthorized interference with user balances or voting outcomes if not managed under strict operational and security best practices.

The method setWhitelistMode() loops through the entire _holders array to performs storage updates. As the array grows, the gas required may exceed the block gas limit, causing the function to revert and potentially causing a DoS.

Findings

Code
Title
Status
Severity
F-2025-1409Compliance Status is Decoupled from Voting Power
fixed

Medium
F-2025-1416forceTransfer is Blocked by Pause
fixed

Medium
F-2025-1416burnFrom Can Brick User Accounts
fixed

Medium
F-2025-1408Minting is Allowed for Frozen and Non-Whitelisted Addresses
fixed

Medium
F-2025-1416Voting Power Desynchronization
mitigated

Low
F-2025-1408Missing Zero Address Validation
fixed

Observation
F-2025-1407Floating Pragma
fixed

Observation
F-2025-1408Unnecessary Balance Check in _update Consumes Gas
fixed

Observation
1-8 of 8 findings

Identify vulnerabilities in your smart contracts.

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:

Assets in Scope

src
RealEstateToken.sol - src › RealEstateToken.sol

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.

Disclaimer