Yuga Labs Rescues $500,000 in Stolen NFTs from Flooring Protocol Exploit
A rare CryptoPunks holder had a lucky break when Yuga Labs intervened in an exploit of Flooring Protocol's accounting bug, recovering two valuable NFTs. The company's white-hat operation saved $500,000 worth of assets on June 8.
The Flooring Protocol, which allows for fractional ownership of NFTs, was vulnerable to an attacker who exploited a flaw in its logic. This allowed them to mint near-infinite fpTokens and drain liquidity pools, putting high-value assets at risk.
Yuga Labs deployed a defensive contract that mirrored the exploit's mechanics, using the same bug to pull valuable NFTs to safety before they could be claimed by bad actors. The operation recovered 68 NFTs in total, including two CryptoPunks and 29 Bored Ape Yacht Club NFTs.
The company has stated that all recovered NFTs are being held in their custody and will be returned to their rightful owners once the protocol's vulnerability is patched. This rescue highlights concerns about the maturity of NFT-focused DeFi infrastructure, particularly with regards to accounting bugs and smart contract vulnerabilities.