$1 400 000 USD

MARCH 2022

GLOBAL

TREASUREDAO

DESCRIPTION OF EVENTS

"Treasure is a decentralized NFT ecosystem on Arbitrum that is built specifically for metaverse projects. Every project listed on Treasure’s marketplace utilizes MAGIC in their respective metaverses, with each community inventing its own lore and storytelling for this resource. MAGIC, the native token of Treasure, is the sole currency for marketplace transactions. In this way, MAGIC acts as the reserve currency for the entire web of metaverses connected under the Treasure umbrella."

 

"Treasure bridges the growing network of metaverses through an open and composable approach to the convergence of NFTs, DeFi and Gaming." "Treasure projects are linked–narratively and economically–through MAGIC. The DAO uses MAGIC emissions to grow new projects and continue supporting more mature ones."

 

"Cross-ecosystem ties are bolstered through our interrelated resource model; $MAGIC (Power), Treasures (NFT | Resources) and Legions (NFT | Players)"

 

"Treasure DAO was hacked on March 3 at 7:33 a.m. (EST), according to a post mortem analysis authored by the security-focused firm Certik." "[A]n attacker discovered an exploit that resulted in the loss of “more than 100 NFTs from unsuspecting users."

 

“Treasure DAO, an NFT trading platform on Arbitrum, was exploited by an unknown attacker who took advantage of a flaw in the platform’s code,” Certik’s analysis details.

 

"Treasure DAO co-founder John Patten also tweeted about the event after the attacker stole the funds. “Treasure marketplace is being exploited. Please delist your items. We will cover the costs of the exploit—I will personally give up all of my Smols to repair this,” Patten said."

 

"I cannot fathom what subhuman targets a fair launch marketplace for robbery, but they will not defeat the community."

 

"A Crypto Twitter deep-dive reveals that TreasureDAO marketplace users started noticing zero price transactions going out of the marketplace. With team effort, users revealed that the underlying code of the platform allowed hackers to purchase previously listed NFTs for a price of 0 MAGIC."

 

"According to the Isotile team, a greater-than sign was missing in an important line of the code. This essentially allowed NFTs that had a quantity value of 0, to be sold for the same value of 0 MAGIC."

 

"The incoming _quantity parameter is not judged to be 0." "According to SlowMist analysis, the core of this vulnerability lies in the lack of judgment that the incoming _quantity parameter is not 0 before the ERC-721 standard NFT transfer, resulting in ERC -721 Standard NFT can be transferred directly and the cost of purchasing NFT is calculated as 0 when calculating the price."

 

“The attacker took advantage of an error in the marketplace’s Buyer.buyItem function, which allowed them to set the _quantity equal to 0,” Certik’s post mortem says. “With a quantity of 0, totalPrice is also 0, as totalPrice = _pricePerItem * _quantity. This means the attacker paid nothing for the NFTs they ‘purchased.’ As there is no requirement that _quantity > 0, the function executes normally. This bug could be resolved by requiring a greater than 0 value for the _quantity variable.”

 

"To illustrate, we use the above hack tx and show the key steps below: (1) Call buyItem() with valid NFT token and NFT ID, but w/ invalid ZERO quantity. (2) Treasure Marketplace sells the NFT but charges ZERO MAGIC (due to ZERO quantity)." "The hack is made possible due to a bug in distinguishing ERC721 and ERC1155 in buyItem(), which mis-calculates the price of ERC721 as ERC1155 with the (untrusted) given 0 quantity."

 

"The TreasureDAO team quickly shut down the smart contract that allowed the exploit, which successfully limited the damages users sustained."

 

"17 Smol Brains, the most popular NFTs traded on Arbitrum, were stolen. Based on their listed prices on the TreasureDAO platform, the total value of these pieces came up to be 426,511.38 in MAGIC. However, the dollar value of the loot was around 1.4 million."

 

"The company’s report notes that “over 100 NFTs were stolen in the attack,” as the attacker leveraged a vulnerability in the marketplace’s “buyer buy item” function." "According to the team behind virtual world Isolite, a total of 153 NFTs were stolen from the marketplace. The majority of them belonged to the Smol Brains collection, which is the most expensive project on the platform. At the time of writing, the cheapest Smol Brains NFT costs 2,469 MAGIC, or about $8,400."

 

"Certik’s analysis of the Treasure DAO situation notes that the protocol’s native token MAGIC shed over 40% in losses against the U.S. dollar." "The aforementioned hack also triggered a sharp fall in the price of MAGIC. It went from around $3.8 to as low as $2.6 on the charts, according to CoinGecko. Even so, worth pointing out that in the hours later, the alt’s price recovered somewhat."

 

"On further investigation, a blockchain address shared by Twitter sleuths gave some insight into the details associated with the exploit."

 

"Hours after it was stolen, developers confirmed that hackers had begun returning stolen “Smol Brains” and other NFTs."" “After some initial analysis and tracing of the hacker’s wallet on Twitter, many stolen NFTs were returned.” "Surprisingly, the hackers started to return stolen “Smol Brains” and other non-fungible tokens (NFTs) hours after the exploit. Other accounts too confirmed this development." "The price of MAGIC tokens recovered by 40% after hackers started to return the NFTs."

 

"Almost all Hacked NFTs being returned. Your smols and legions will get back to you soon friendss"

TreasureDAO has a NFT marketplace running on the Arbitum blockchain. A bug existed in the smart contract marketplace hot wallet where the NFTs could be taken by specifying a "quantity" of zero, at which point a price of 0 would be calculated for the item. This was exploited to steal hundreds of NFTs.

Sources And Further Reading

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