LienToken: Lender and liquidator can collude to block auction and seize collateral

Lines of code Vulnerability details If a lender offers a loan denominated in an ERC20 token that blocks transfers to certain addresses for example, the USDT and USDC blocklist, they may collude with a liquidator or act as the liquidator themselves to prevent loan payments, block all bids in the...

Liquidation bots are needed to stabilize the system.

Lines of code Vulnerability details Impact Allowing liquidation bots to arbitrage would stabilize the system. The majority of liquidations are done by liquidation bots. For liquidation bots to be viable there has to exist a secondary market where the assets can be instantly sold. This is especial...

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...

fundingRate formula and _multiplier()

Lines of code Vulnerability details Impact The formula used formultiplier will not work as expected. The target price update will be inaccurate and all the borrow/repay/liquidation functions will use the inaccurate target price. The impacts might be: Target price and mark price track will not wor...

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...

Users may be liquidated right after taking maximal debt

Lines of code Vulnerability details Impact Since there's no gap between the maximal LTV and the liquidation LTV, user positions may be liquidated as soon as maximal debt is taken, without leaving room for collateral and Papr token prices fluctuations. Users have no chance to add more collateral o...

NFT owner only is allowed for liquidation, this may not work for all the cases, the debt can be insolvent

Lines of code Vulnerability details Impact When bad debt is not paid or not able to recover the through auction of NFT, then the debt will be insolvent. Proof of Concept Contract allows for liquidation to recover the debt. Also, it has the auctioning mechanism to recover the debt by selling the...

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...

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...

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:...

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...

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...

Anyone can prevent themselves from being liquidated as long as they hold one of the supported NFTs

Lines of code Vulnerability details Contrary to what the function comments say, removeFeeder is able to be called by anyone, not just the owner. By removing all feeders i.e. floor twap price oracle keepers, a malicious user can cause all queries for the price of NFTs reliant on the NFTFloorOracle...

Bad debt will likely incur when multiple NFTs are liquidated.

Lines of code Vulnerability details Description getUserBalanceForERC721 in GenericLogic gets the value of a user's specific ERC721 xToken. It is later used for determining the account's health factor. In case isAtomicPrice is false such as in ape NTokens, price is calculated using: uint256...

WPunk will become locked if liquidator ops to receive the underlying token instead of nToken

Lines of code Vulnerability details Impact WPunks received directly as the result of liquidation will be unable to be withdrawn Proof of Concept function withdrawPunkuint256 calldata punkIndexes, address to external nonReentrant INToken nWPunk = INToken Pool.getReserveDataaddressWPunk.xTokenAddre...

suppliers funds loss because attacker can transfer his collateralized tokens when health factor is below liquidation threshold by reentrancy attack during executeLiquidateERC20() logic and transferring collateralize

Lines of code Vulnerability details Impact Function executeLiquidateERC20 is for liquidating a position if its Health Factor drops below 1. The caller liquidator covers liquidationAmount amount of debt of the user getting liquidated, and receives a proportional amount of the collateralAsset plus ...

Repaying a line of credit with a higher than necessary claimed revenue amount will force the borrower into liquidation

Lines of code Vulnerability details A borrower can repay parts of a credit line with the SpigotedLine.useAndRepay function. This function will use amount of unusedTokenscredit.token as a repayment. However, if amount exceeds the principal and the accrued interest, credit.principal will underflow...

Getting collateral value by calling previewRedeem can be manipulated

Lines of code Vulnerability details Proof of Concept The code in EscrowLib is trying to calculate the value of a collateral by calling the previewRedeem method of an ERC4626 vault, when the collateral is a token from such a vault. The EIP4626 specification explicitly says The preview methods retu...

It is really dangerous to borrow to your full credit limit

Lines of code Vulnerability details Impact If a borrower borrows to their max credit limit even the smallest price decrease could get them liquidated. Causing them a loss of collateral. Proof of Concept function testBorrowfullCreditAmount public gibWethuser, wethTestAmount; gibDBRuser,...