Core Contracts
Regnum Aurum Acquisition Corp
HardhatReal World AssetsNFT
77,280 USDC
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Submission Details
Severity: high
Valid

NFTs from liquidation will remain stuck in the Stability pool

tigerfrake

Summary

The Stability pool does not inherit any functionality for handling ERC721 tokens. However, during liquidation, all of the user's NFTs are transfered to this contract. This means that there will be no means to handle them once received.

Vulnerability Details

The LendingPool contract is defined as follows:

contract LendingPool is ILendingPool, Ownable, ReentrancyGuard, ERC721Holder, Pausable {

This contract inherits from ERC721Holder which gives it the capabilities to interact witrh ERC721 tokens. As such, uers are able to deposit their NFTs to this contract as collateral:

user.nftTokenIds.push(tokenId);
user.depositedNFTs[tokenId] = true;
​
>> raacNFT.safeTransferFrom(msg.sender, address(this), tokenId);

Now, during liquidation, these NFTs deposited by the user are transfered to the Stability pool:

for (uint256 i = 0; i < user.nftTokenIds.length; i++) {
uint256 tokenId = user.nftTokenIds[i];
user.depositedNFTs[tokenId] = false;
// @audit-issue NFTs will be stuck in stabilityPoolL
>> raacNFT.transferFrom(address(this), stabilityPool, tokenId);
}

Here is how stabilityPool is defined:

contract StabilityPool is IStabilityPool, Initializable, ReentrancyGuard, OwnableUpgradeable, PausableUpgradeable {

None of the inherited contracts posess the configs for handling NFTs. Also, notice that the transfer is performed by transferFrom() which does not check for receiver compatibility.

Impact

As such, these NFTs will be transfered without any reverts. However, there will be no means to interact with them once received therefore stuck.

Tools Used

Manual Review

Recommendations

Inherit the ERC721Holder contract to the Stability pool to enable it to handle NFTs:

+ import "@openzeppelin/contracts/token/ERC721/utils/ERC721Holder.sol";
​
- contract StabilityPool is IStabilityPool, Initializable, ReentrancyGuard, OwnableUpgradeable, PausableUpgradeable {
+ contract StabilityPool is IStabilityPool, Initializable, ReentrancyGuard, OwnableUpgradeable, PausableUpgradeable, ERC721Holder {
Updates

Lead Judging Commences

inallhonesty Lead Judge 7 months ago
Submission Judgement Published
Validated
Assigned finding tags:

Liquidated RAACNFTs are sent to the StabilityPool by LendingPool::finalizeLiquidation where they get stuck

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