In the fast-evolving landscape of blockchain smart contracts, security boundaries are often enforced via declarative models — one such being capability declarations. But what happens when those boundaries exist only at the surface level?

Security researcher julianor discovered a critical flaw in the CosmWasm capabilities model, earning a $2,000 bounty from the Cosmos team. This issue allowed attackers to bypass capability restrictions — essentially performing actions that a chain had explicitly forbidden for smart contracts.

The vulnerability stemmed from a naïve implementation of capabilities combined with misleading documentation, enabling arbitrary action execution by simply omitting a string during contract compilation.

This article walks through the vulnerability, how it was exploited, why it broke the intended security model, and the wider implications for capability-based execution environments in 2025.

CosmWasm is a smart contract platform built for Cosmos SDK-based blockchains, using…