I’m old-school developer/programmer and it seems that web is peace of sheet. Basic security stuff violated:

I'm a modern web developer who used to be an old-school one.

User provided content (post using custom emojis) caused havoc when processing (doesn’t matter if on server or on client). This is lack of sanitization of user-provided-data.

Yeah - pretty much, though there are some mitigating factors.

Strictly speaking, it was the alt text for the emoji. Alt text is HTML, and rather than allow arbitrary HTML they allowed another language called Markdown. Markdown is "a plain text" language with human readable syntax specifically designed to be converted into HTML.

Markdown is the right format to use for emoji alt texts, but you do need to be careful of one thing - the original purpose of Markdown was to allow HTML content to be easier to write/read and it is a superset of the HTML language. So arbitrary HTML is valid markdown.

Virtually all modern Markdown parsers disable arbitrary HTML by default, but it's a behaviour which can be changed and that leaves potential for mistakes like this one here. Specifically the way Lemmy injected emojis with alt text into the Markdown content allowed arbitrary HTML.

This wasn't an obvious mistake - the issue over on Lemmy's issue tracker is titled "Possible XSS Attack" because they knew there was an XSS Attack somewhere and they weren't immediately sure if they had found it in the emoji system. Even now reading the diff to fix the vulnerability, it still isn't obvious to me what they did wrong.

It's fairly complex code and complexity is the enemy of security... but sometimes you have to do complex things. Back in the "old-school" days, nobody would have even attempted to write something as complicated as a federated social network...

JavaScript (TypeScript) has access to cookies (and thus JWT). This should be handled by web browser, not JS.

Yeah - the Lemmy developers made a mistake there. There are a few things they aren't doing right around cookies and JWT tokens.

Hopefully they fix it. I expect they will... It was already actively being discussed before this incident, and those discussions have been seen by a lot more people now.

How the attacker got those JWTs? JavaScript sent them to him? Web browser sent them to him when requesting resources form his server? This is lack of site isolation, one web page should not have access to other domains, requesting data form them or sending data to them.

There are several levels of isolation that could have blocked this:

1. Users should not be able to inject arbitrary HTML.
2. A flag on the page should be set telling the browser to ignore JavaScript in the body of the page - this is a relatively new feature in the web and disabled by default for obvious backwards compatibility reasons, but it should be set especially on a high value target like Lemmy, and I expect once it's been around a little longer browsers will enable it by default.
3. A flag should have been set to block JavaScript from contacting an unknown third party domain. Again, this isolation is a relatively new web feature and currently disabled by default.
4. As you say, JavaScript shouldn't be able to access the JWT token or the cookie. That's not a new feature in the web, it's just one Lemmy developers didn't take advantage of (I don't know why)
5. Even if all of those previous levels of isolation failed... there are things Lemmy should be doing to mitigate the attack. In particular instance admins have had to manually reset JWT tokens. Those tokens should have expired somehow on their own - possibly the moment the attacker tried to use them.

The attacker logged-in as admin and caused havoc. Again, this should not be possible, admins should have normal level of access to the site, exactly the same as normal users do. Then, if they want to administer something, they should log-in using separate username + password into separate log-in form and display completely different web page, not allowing them to do the actions normal users can do. You know, separate UI/applications for users and for admins.

Yep - the modern best practice is for admins to manage the site via a completely different system. That adds considerable complexity and cost though, so it's rarely done unfortunately. But you know, Lemmy is open source... so if someone wants to take on that work they can do it.

I'll add one more - it should have taken less time to close the exploit... but given this is the first serious exploit I'll forgive that.

Ultimately several of failures contributed to this attack. I expect many of those failures will be corrected in the coming weeks, and that will make Lemmy far more secure than it is right now - so that next time there's a bug like the one in the Markdown parser it isn't able to cause so much disruption.

The good news is no harm was done, and a lot of people are going to learn some valuable lessons as a result of this incident. Ultimately the outcome is a positive one in my opinion.