BUNKER FINANCE

DESCRIPTION OF EVENTS

"Get a loan using your NFTs Bunker is the easiest way to borrow against your NFTs" "bunker.finance allows you to instantly lend and borrow without needing to wait to match borrowers and lenders. Our protocol currently allows you to borrow against CryptoPunks but more NFT collections will soon become available to use as collateral."

"Each NFT collection has its own, separate lending market on Bunker." "Borrow as much as you need and repay whenever you like." "As a lender, you earn interest every single block, and can withdraw your capital at any time." "We allow borrowers to take out loans instantly and enable lenders to immediately start earning interest. Borrowers no longer need to wait to be matched manually to a lender and vice versa."

"Bunker is a platform for NFT-backed loans. As a borrower, you can use any supported NFT as collateral for a loan of ETH or ERC-20 tokens. As a lender, you can deposit ETH or ERC-20 tokens into a lending pool for any supported NFT collection and immediately start earning interest."

"NFTs deposited to Bunker are represented as bNFTs. To mint a bNFT, visit the pools page, and select the appropriate pool. You should see all of your NFTs belonging to the specified collection in the ‘Collateral’ section. Simply click on the ‘Wrap’ button to wrap your NFT as a bNFT. While a bNFT is being used as collateral for a loan, it cannot be transferred from your wallet until the loan is fully repaid. When the bNFT is not actively being used as collateral, it is freely transferable."

"Bunker Finance patched a function parameter validation vulnerability in its CryptoPunks lending pool thanks to a responsible disclosure by shenwilly."

"When depositing NFTs as collateral on Bunker, users receive bNFTs (referred to internally as cNFTs). The cNFT contract is an ERC-1155 compliant wrapper that stores an underlying ERC-1155, ERC-721, or CryptoPunk and enables it to be used as collateral on Bunker.

When minting cNFTs with ERC721 or Punks, the param amounts is not checked. Anyone can input a large value and that amount of CNft will be minted to them. They can then redeem the NFT, while still having leftover CNfts corresponding to that NFT. This means that when the NFT has changed hands and gets deposited into CNft again, the attacker can redeem it again and steal the NFT."

"Attacker calls mint, using their punkId as tokenId and 5 as the amount. Attacker receives 5 CNfts. Attacker calls redeem to retrieve their punk. Left with 4 CNfts. Attacker sells the punk to Alice. Alice calls mint using the same punk. Attacker can now redeem the punk, stealing it from Alice."

"The mint function of CNft as well as the seize and redeem functions have all been updated to check that amounts has not incorrectly specified. For all non-ERC1155s, amounts can now only be 1. These updates will be included in v2 of our protocol, which will be going live shortly. In the mean time, depositing collateral on v1 remains paused but assets can be withdrawn at any time."

"As a result, no assets were lost as a result of the vulnerability and a fix has been included in our upcoming v2 release. Details of our upcoming audit contest and bug bounty program will be published soon. In the meantime, please reach out to us via Discord for any vulnerability disclosures."

"We would like to thank @shenwilly_ again, as well as our security team for responding quickly and preventing any losses."

Bunker Finance is an NFT borrowing protocol, which allows users to borrow funds against their NFTs, or to lend funds and earn interest. On April 15th, 2022, the protocol was provided with details of an exploit, which would have allowed users of the protocol to steal NFTs provided as collateral by other users. The vulnerability required the user to provide their NFT as collateral with an incorrect count of tokens provided, then sell or transfer the NFT to another user who also provided the same NFT as collateral. Deposits of NFTs were temporarily suspended while the issue was resolved. shunwilly was ultimately provided with an undisclosed bounty amount.

BlockThreat - Week 25, 2022 - by Peter Kacherginsky (Mar 18)
Bunker.finance Vulnerability Postmortem — BNft Amount Manipulation | by bunker.finance | Medium (Apr 8)
https://bunker.finance/ (Apr 8)
@bunker_finance Twitter (Apr 8)
https://bunker.finance/docs (Apr 8)
https://bunker.finance/docs/overview/wrapping-and-unwrapping-bNFTs (Apr 8)

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