Azoundria at 21:44, 13 September 2024

2024-09-13T21:44:57Z

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	[[File:Pikefinance.jpg\|thumb\|Pike Finance Logo/Homepage]]Pike Finance is a loan protocol which allows loans to be taken out using collateral on other chains. The smart contract was upgraded after an issue where USDC could be withdrawn without proper validation. The team corrected the vulnerability with an upgrade which allowed all the assets to be drained from their smart contract, due to the contract being not considered to be initialized when memory shifted. The team eventually promised refunds to users, which have yet to be honoured.<ref name="rekthqtwitter-13600" /><ref name="rektnews-13601" /><ref name="pikefinance-13603" /><ref name="pikefinancedocs-13604" /><ref name="mirror-13605" />		[[File:Pikefinance.jpg\|thumb\|Pike Finance Logo/Homepage]]Pike Finance is a loan protocol which allows loans to be taken out using collateral on other chains. The smart contract was upgraded after an issue where USDC could be withdrawn without proper validation. The team corrected the vulnerability with an upgrade which allowed all the assets to be drained from their smart contract, due to the contract being not considered to be initialized when memory shifted. The team eventually promised refunds to users, which have yet to be honoured.<ref name="rekthqtwitter-13600" /><ref name="rektnews-13601" /><ref name="pikefinance-13603" /><ref name="pikefinancedocs-13604" /><ref name="mirror-13605" /><ref>https://web.archive.org/web/20240516185331/https://hacked.slowmist.io/?c=&page=2 (Accessed May 22, 2024)</ref>

	== About Pike Finance ==		== About Pike Finance ==

Azoundria: Created page with "{{Imported Case Study With About|source=https://www.quadrigainitiative.com/casestudy/pikefinancevariablestoragevulnerability.php}} {{Unattributed Sources}} Pike Finance Logo/HomepagePike Finance is a loan protocol which allows loans to be taken out using collateral on other chains. The smart contract was upgraded after an issue where USDC could be withdrawn without proper validation. The team corrected the vulnerability with an upgrade whi..."

2024-05-07T00:05:07Z

Created page with "{{Imported Case Study With About|source=https://www.quadrigainitiative.com/casestudy/pikefinancevariablestoragevulnerability.php}} {{Unattributed Sources}} thumb|Pike Finance Logo/HomepagePike Finance is a loan protocol which allows loans to be taken out using collateral on other chains. The smart contract was upgraded after an issue where USDC could be withdrawn without proper validation. The team corrected the vulnerability with an upgrade whi..."

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{{Imported Case Study With About|source=https://www.quadrigainitiative.com/casestudy/pikefinancevariablestoragevulnerability.php}}
{{Unattributed Sources}}

[[File:Pikefinance.jpg|thumb|Pike Finance Logo/Homepage]]Pike Finance is a loan protocol which allows loans to be taken out using collateral on other chains. The smart contract was upgraded after an issue where USDC could be withdrawn without proper validation. The team corrected the vulnerability with an upgrade which allowed all the assets to be drained from their smart contract, due to the contract being not considered to be initialized when memory shifted. The team eventually promised refunds to users, which have yet to be honoured.<ref name="rekthqtwitter-13600" /><ref name="rektnews-13601" /><ref name="pikefinance-13603" /><ref name="pikefinancedocs-13604" /><ref name="mirror-13605" />

== About Pike Finance ==
"Universal Liquidity Protocol A next generation money market 一 deposit collateral on chain A, borrow on chain B."

"Pike is a universal liquidity market optimized for native assets." "Pike is a universal liquidity market that enables lending and borrowing using native assets directly on their respective blockchains, eliminating the need for wrapping and cross-chain transfers."

"Pike enables lending and borrowing using native assets directly on their respective blockchains, eliminating the need for wrapping and cross-chain transfers. For example, users can deposit Arbitrum's ARB tokens as collateral on their native Arbitrum chain, while borrowing other assets on a different blockchain." "Pike is enabled by Wormhole Cross-Chain Messaging, Circle’s Cross-Chain Transfer Protocol, and Pyth Data Feeds."

"Pike redefines the user experience for cross-chain lending and borrowing - Our focus on native assets remove the need for assets with suffixes and prefixes." "Seamlessly maximize your yields and leverage Pike’s native cross-chain functionality 一 No longer do you have to constantly bridge your assets to explore opportunities across the ecosystem." "Pike’s hub and spoke architecture is designed to fade into the background 一 Allowing users to realize an interconnected DeFi vision. Utilize a suite of assets from across the ecosystem 一 Ranging from yield bearing stablecoins and LSTs, to LP tokens."

"Wormhole messaging eliminates risks associated with cross-chain bridges and bridged assets 一 reducing attack vectors stemming from pricing oracles."

== The Reality ==
Upgrading the smart contract introduced a vulnerability since the alignment of contract data was shifted.

== What Happened ==
The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.
{| class="wikitable"
|+Key Event Timeline - Pike Finance Variable Storage Vulnerability
!Date
!Event
!Description
|-
|April 30th, 2024 4:19:11 PM MDT
|Ethereum Attack Transaction
|The attack transaction on Ethereum blockchain.
|-
|May 1st, 2024 1:32:00 AM MDT
|Tweet About Incident
|Pike Finance puts together a tweet with a high level technical analysis of the exploit.
|-
|May 2nd, 2024 5:07:49 AM MDT
|Path Forward Published
|Pike Finance publishes a path forward for both vulnerabilities and how they plan to compensate users.
|}

== Technical Details ==
"In order to pause the protocol, the spoke contracts were upgraded and there was the inclusion of an additional dependency within the smart contract code.

This dependency introduced new variables which altered the storage layout - in particular, the position of the *initialized* variable.

As a result, the position occupied by the *initialized* variable was taken over by other variables, leading to a misalignment in storage mapping.

This misalignment caused the contract to behave as if it was uninitialized, since the *initialized* variable could no longer be accessed.

As a result, attackers were then able to upgrade the spoke contracts, bypassing admin access, and as a result, withdraw funds."

Attacker: 0x19066f7431df29a0910d287c8822936bb7d89e23

Attack contract: 0x1da4bc596bfb1087f2f7999b0340fcba03c47fbd

Target contract: 0xfc7599cffea9de127a9f9c748ccb451a34d2f063

Attack Transaction on Optimism: 0x19066f7431df29a0910d287c8822936bb7d89e23

Attack Transaction on Arbitrum Transaction: 0x19066f7431df29A0910d287C8822936Bb7D89E23

Attack Transaction on Ethereum:
0xe2912b8bf34d561983f2ae95f34e33ecc7792a2905a3e317fcc98052bce66431

== Total Amount Lost ==
On the 30th of April 2024, the Pike Beta protocol was exploited for 99,970.48 ARB, 64,126 OP and 479.39 ETH.

The total amount lost has been estimated at $1,600,000 USD.

== Immediate Reactions ==
The Pike Finance team acknowledge the exploit and published a blog post with the plan forward.

== Ultimate Outcome ==
Ongoing.

== Total Amount Recovered ==
The Pike Finance team published a blog post with the plan forward.

"In the coming days, we will disclose a full list of wallet addresses with active supply and borrow positions prior to the protocol halt as of April 26 08:35 PM UTC. Addresses with a supply position will have a credit balance, and addresses with a borrow position will have a debit balance. We will calculate the Net Balance [Total Value of Supply - Total Value of Borrow] and assess whether liquidation levels have been triggered using asset prices as of April 26 08:35 PM UTC. Addresses with a positive net balance after accounting for liquidation checks will be restituted in full directly to their wallets ($OP via Optimism, $ARB via Arbitrum, $ETH and $USDC via Base)."

"The Community Treasury allocation of $P has been set aside for various usages, however one of these is of course, as an insurance fund.

As a result, we will be using 4% of the total supply of $P (from the Community Treasury allocation) as collateral to borrow the necessary stablecoin funds from the team treasury (around $2M USD across both exploits).

These will then be used to purchase the relevant assets on the open market and reimburse users for what they had within Pike prior to the exploit.

As the protocol generates revenue and launches the $P token, this loan will then be paid back accordingly - transferring the $P tokens used as collateral to the Foundation Treasury.

Once the debt is repaid, the $P will be released back to Insurance pool"

The total amount recovered has been estimated at $1,600,000 USD.

== Ongoing Developments ==
Refunds are still ongoing.
== Individual Prevention Policies ==
{{Prevention:Individuals:Placeholder}}

{{Prevention:Individuals:End}}

== Platform Prevention Policies ==
{{Prevention:Platforms:Placeholder}}

{{Prevention:Platforms:End}}

== Regulatory Prevention Policies ==
{{Prevention:Regulators:Placeholder}}

{{Prevention:Regulators:End}}

== References ==
<references><ref name="rekthqtwitter-13600">[https://twitter.com/RektHQ/status/1787169917684625878 @RektHQ Twitter] (May 6, 2024)</ref>

<ref name="rektnews-13601">[https://rekt.news/pike-rekt/ Rekt - Pike Finance - Rekt] (May 6, 2024)</ref>

<ref name="pikefinance-13603">[https://www.pike.finance/ Pike | Universal Liquidity Protocol] (May 6, 2024)</ref>

<ref name="pikefinancedocs-13604">[https://docs.pike.finance/ Introduction to Pike | User Docs | Pike] (May 6, 2024)</ref>

<ref name="mirror-13605">[https://mirror.xyz/pikefinance.eth/klLV4rRqNYxjRQp0NAfVLboLYtX98P9iYOOf06FUapg Pike: A Path Forward — Pike] (May 6, 2024)</ref></references>

Pike Finance Variable Storage Vulnerability - Revision history

Azoundria at 21:44, 13 September 2024