Liquidation logic is incorrect in some conditions

Lines of code Vulnerability details Impact Because purchaseLiquidationAuctionNFT function clears remaining debt of debtor if he has no more collateral, it's possible that when 2 auctions exists in same time, liquidation logic will not work properly and debt will be nullified before last auction i...

When liquidation is not locked, anyone can liquidate another persons' collateral

Lines of code Vulnerability details Impact Petty users can liquidate other people's NFT immediately when the liquidation threshold is reached. Proof of Concept The owner controls the function setLiquidationsLocked and calls the function when a collateral needs to be liquidated function...

Borrowers don’t need to run the risk of being liquidated

Lines of code Vulnerability details Impact Borrowers are able to borrow Papr, swap it for another asset in Uniswap without ever having to pay their debt because they can remove their collateral without paying their debt. Ultimately leading to free assets at the cost of others. Proof of Concept As...

Contract owner can drain all NFT collateral

Lines of code Vulnerability details Impact To add NFTs as collateral to the protocol and it to create debt, the owner has to approve each NFT contract address first. As anyone can create their own papr vaults with arbitrary allowed NFTs by design, this opens the possibility for malicious actors t...

purchaseLiquidationAuctionNFT() may incorrectly returned the Auction funds to the liquidated user

Lines of code Vulnerability details Impact may incorrectly returned the Auction funds to the liquidated user in purchaseLiquidationAuctionNFT, After someone purchases the auction NFT, the amount of the auction received will be distributed. In the existing logic, when the amount of the auction is...

Reentrancy attack allows to get loan for free

Lines of code Vulnerability details Impact Reentrancy attack allows to get loan for free when startLiquidationAuction is called on last collateral token. Proof of Concept When user has a bad debt, then anyone can start auction for his nft. To purchase token, liquidator can call...

Early NFT collections such as CryptoPunks and MoonCats can not be used as a collateral

Lines of code Vulnerability details Impact Early NFT collections such as CryptoPunks, EtherRocks and MoonCats are not compliant with ERC721 standard. therefore, they can not be used as a collateral since transferring will fail. I beleive it would be a huge advantage for the protocol to support su...

attacker can create un collateralized debt by reentrancy attack during _removeCollateral() by removing all collaterals and liquidating the last one which would set debt to zero. unfair liquidation can happen with reentrancy too

Lines of code Vulnerability details Impact Function removeCollateral removes collateral from msg.senders vault and code allows for onReceive hook to sell and repay debt before the debt check. during the hook function user can call other function of the PaprController contract, it's possible for...

Liquidations force users into bigger debts

Lines of code Vulnerability details Impact User's uncovered debt increases when auction starts on their collateral token. The increased debt may be too big for a user and they might not be able to repay it, which forces them to wait for the auctioned token to be sold and accrue more debt due to t...

PaprController is vulnerable to reentrancy attacks

Lines of code Vulnerability details Impact Malicious users can steal PAPR tokens through reentrancy attacks. Proof of Concept Function PaprController.purchaseLiquidationAuctionNFT may trigger a reentrancy becase it calls ERC721.safeTransferFrom in NFTEDA.purchaseNFT:...

Wrong implemention of ERC721TokenReceiver interface leads to incorrect collateral ownership and NFT loss

Lines of code Vulnerability details Impact To add a collateral, one could send the NFT directly to the contract, onERC721Received is called then to handle adding the collateral to the vault. However, if the user sends the NFT via an operator then the ownership of the collateral will be assigned t...

Some NFTs could be possibly stuck and can not be withdrawn when removing the collateral

Lines of code Vulnerability details Impact When adding a collateral, the protocol transfers the NFT from the user to the contract by calling ERC721's transferFrom, and when removing the collateral, safeTransferFrom is called to allow for onReceive hook to be triggered as intended by the protocol...

function underwritePriceForCollateral() uses message.timestamp > block.timestamp to validate oracle message timestamp but it can create MEV as miners can control block.timestamp and revert some of the user's transactions

Lines of code Vulnerability details Impact Function underwritePriceForCollateral validates the oracle message which includes the price of the NFT and returns the price of an asset from a signed oracle message. to check the validity of the message's timestamp code checks that if...

Stealing fund by applying reentrancy attack on removeCollateral, startLiquidationAuction, and purchaseLiquidationAuctionNFT

Lines of code Vulnerability details Impact By applying reentrancy attack involving the functions removeCollateral, startLiquidationAuction, and purchaseLiquidationAuctionNFT, an Attacker can steal large amount of fund. Proof of Concept Bob a malicious user deploys a contract to apply the attack...

Borrowers may earn auction proceeds without filling the debt shortfall

Lines of code Vulnerability details Impact The proceeds from the collateral auctions will not be used to fill the debt shortfall, but be transferred directly to the borrower. Proof of Concept Assume N is an allowed NFT, B is a borrower, the vault V is vaultInfoBN: 1. B add two NFTsN-1 and N-2 as...

Any user which holds Raes tokens can infinitely freeze NFT in OptimisticListingSeaport

Lines of code Vulnerability details Description OptimisticListingSeaport exposes propose method to create new proposal, and rejectProposal to remove a listing in proposal stage. In propose, proposer commits a certain amount of collateral: // Sets collateral amount to pending balances for withdraw...

User loses collateral converted to pendingBalance when cash() or list() is called

Lines of code Vulnerability details Description In OptimisticListingOpensea, there are several functions which update pendingBalances of a proposer: 1. list 2. cash 3. propose Unfortunately, in list and cash the = operator is used instead of += when writing the new pendingBalances. For example:...

User can send a proposal and instantly take back their collateral, keeping the proposal active without risking any Raes amount.

Lines of code Vulnerability details Description In OptimisticListingSeaport.sol, users call propose to set a new proposal. The pendingBalance is updated immediately for the calling proposer: // Sets collateral amount to pending balances for withdrawal pendingBalancesvaultproposedListing.proposer ...

Proposal can be infinitely DOSed with no additional conditions

Lines of code Vulnerability details Description OptimisticListingSeaport.sol is easily DOSable due to the following conditions: 1. A new proposal overrides the existing proposal 2. The deposited collateral can be any non-zero amount 3. Only requirement is that pricePerToken is lower than before. ...

Upgraded Q -> M from #334 [1671456734920]

Judge has assessed an item in Issue 334 as M risk. The relevant finding follows: Collateral.withdraw allows the manager to withdraw an arbitrary amount of baseToken from Collateral. The only check is in the ManagerWithdrawHook.hook call, where it checks the withdrawal does not drop the amount of...