Phala Treasury Proposal: Security Audit of Dstack Confidential Computing Infrastructure for Phala Cloud

Beneficiary account:
3zkooCHZAiukUCPp1dXwTRkRwyfzcyzFFZ1tptXwZShnFoPx

Budget request for the proposal:
1 PHA = 0.1009 USD according to EMA7 of 11th Jul,2025 by CoinMarketCap

• Sum of event expenses in USD: 80,000 USD
• Sum of event expenses in PHA: 792,864 PHA

1. Purpose

This proposal seeks funding from the Phala Treasury to cover the costs associated with a professional third-party security audit of the Dstack framework—Phala Cloud’s core confidential computing infrastructure built atop Intel TDX.

The audit was conducted by zkSecurity, a respected firm with deep expertise in zero-knowledge and trusted execution environment security.

2. Background: What is Dstack?

Dstack is Phala Cloud’s next-generation confidential computing stack, built to support containerized applications running inside Intel TDX-based Confidential Virtual Machines (CVMs). It is the foundation for decentralized confidential computing workloads, supporting remote attestation (RA-TLS), full disk encryption, dynamic application deployment, and secure key provisioning via dstack-KMS.

Due to its foundational role in Phala Cloud, securing Dstack is a high-priority task for the long-term reliability and trust of the entire network.

3. Scope of the Audit

The audit covered two main codebases:

• dstack (commit be9d0476)
• meta-dstack (commit 5b63aec3)

Key audited components include:

• ra-tls, ra-rpc – for attestation and TLS binding
• guest-agent – in-guest container attestation & key services
• dstack-util – CLI and system setup tools
• Yocto BitBake recipes – for building trusted OS images
• QEMU/TDX runtime integrity checks
• Measurement and sealing via Intel RTMRs

The audit was performed in two stages:

• Application & runtime interface review
• OS image, boot integrity, and attack surface analysis

4. Summary of Findings

The auditors identified and categorized 14 findings, including:

• 1 High severity – Trusted firmware configuration (OVMF) defaulting to a host-trusting mode.
• 7 Medium severity – Issues like unverified container digests, environment injection risks, and incomplete runtime measurements.
• 3 Low severity – Logging exposure, limited measurement coverage.
• 3 Informational – Documentation and deployment guidance gaps.

All high and medium severity issues were acknowledged and addressed promptly. Fixes include:

• Migrating to secure OVMF builds
• Disabling unnecessary guest agents
• Improving image hardening and measurement completeness
• Expanding documentation and pre-launch validation

5. Impact to Phala Network

• Security: The audit significantly improves the integrity, confidentiality, and trust guarantees of Phala Cloud.
• Trust: With Dstack powering sensitive workloads, verified RA-TLS and secure CVM boot chains enhance Phala’s positioning as a privacy-first decentralized compute cloud.
• Ecosystem Readiness: Audit clearance strengthens the case for enterprise and institutional use of Phala Cloud.

6. Deliverables

• ✅ Full audit report
• ✅ Fixes and mitigations implemented and documented
• ✅ Public GitHub PRs and commits referenced in report
• ✅ Audit artifacts stored in Phala’s governance archive

Security is the foundation of trust. This audit ensures that Dstack, the backbone of Phala Cloud, is built with verifiable integrity, hardened interfaces, and transparency. We believe this proposal is essential to fulfill Phala’s commitment to safe, open, and reliable confidential computing.

We kindly request the Council and community to support this treasury request.